How hard can it be?

emmadragon

Hi,

My OH is self employed and every April we pay an accountant somewhere in the region of £400 to do his tax return however this year I'd quite like to give it a go myself (every penny counts these days). I'm not daft and the OH put 20% aside from every job to pay his tax.

So my questions are:
1) Will I need to submit the returnby the 31st Jan or in April as we have done with the accountant?
2) Do we need to contact HMRC to tell them we are doing it or should we just log in and do it?
3) What happens if you do get it wrong?
4) Should I just leave it to the accountant?

Thanks in advance,
Emma

Artaxerxes

emmadragon wrote: »

Hi,

So my questions are:
1) Will I need to submit the returnby the 31st Jan or in April as we have done with the accountant?
2) Do we need to contact HMRC to tell them we are doing it or should we just log in and do it?
3) What happens if you do get it wrong?
4) Should I just leave it to the accountant?

Thanks in advance,
Emma

1) You have until 31st Jan after the end of the tax year on 5th April to submit the return for that year

2) No need to tell HMRC, you'll just need to register online to get your own user ID/password, and obtain the current workings/accounts from your accountant

3)
a)You might end up paying too much tax if you don't claim as many expenses/allowances as you could
b) you could face hassle/penalties/interest if you are ever the target of an investigation by HMRC and you can't justify the amounts you've claimed from your books

4) Depends. You haven't said how much work is involved, but for a £400 bill I suspect it will be relatively simple. As long as you're prepared to do some research (and maybe go on a quick course, the cost of which would be offset by the saving in fees) it could be worthwhile in the long run.

emmadragon

Thank you, maybe I've left it a little late to have a go this year but might look into it for next year

chrismac1

A lot depends on the nature of your business, how good you are with numbers, and how good your admin. is. Taking two extreme examples from my own client base:

1. I have a dance teacher client which is exactly the sort of business which is most suited to DIY accounting. For three years she did her own, based on some phone calls with HMRC and the HMRC website - which in my view is double trouble! She is not financially savvy and ended up with two key numbers in the wrong boxes - she was claiming the loan repayments on her car as a business expense was the biggest error. She paid £2,500 too little tax and ended up with a load of fines on top of this, plus added accountancy fees to sort out the mess.

2. I have a few clients whose book-keeping is better than the average professional book-keeper. One of the reasons it is better is they use their accounts package to keep track of the business every week, so if they post something to the wrong place it really matters to them and they sort it out. I offer them high level strategic guidance and run the final numbers through my QC process - which keeps up to date for changes in the law - but that's it, and the fees they pay are less than 40% of comparable businesses who don't keep their books in such good order.

emmadragon

Thanks Chris, our business is a simple painting and decorating firm where the biggest income is my OH wages/payment for jobs. His clients usually provide materials so there is not a lot to come off in respect for that but his biggest expense is petrol, he keeps all his reciepts and so I wasn't sure if he claims all that back or whether he should be recording his business millage to get £0.40/mile back. Its little things like that which I am not sure what to do about, plus since his base is our house I was wondering if we can claim back money for the phone bill?

We've booked to go on the HMRC Business Advice Day in March which I hope will be a big help and I want to arrange a meeting with the accountant (though I am worried they will not help as we will be reducing their fee).