Self Assessment - to Accountant or not Accountant?

JaneyCakeLady

Hello folks,
If I am placing a thread and this is already answered somewhere else, please by all means ignore me, but before you do, can someone put me in the right direction? Link to appropriate/similar threads?

I have rented out my house (living with the boyfriend) and did my own return last year, as it was really just 2 months of info for the end of the tax year.

Year on, and some colleagues are putting the fear of god into me about me doing the return myself and suggest visiting an accountant. Money is tight, and I figure if I have all my receipts/paperwork/stuff surely with some time spent, plenty tea and biscuits, and me not going into money-frenzy-panic-I-can't do this mode. I'll manage?

Quote for Accountant to do it was £100-150 (ex VAT). Now I know I could possibly offset the cost on the return, but I'm sure I could manage myself?

I have been snooping around for details of expenses that I can claim for and I've got all my repairs etc/professional fees/mortgage interest etc all calculated out. One thing, I've done some visiting back and forth to the tenants this year in the car, so can I claim for mileage? If so what? 45p per mile as is stated on the HMRC website?

I'm sure there are many of you out there who are already doing the same as me, and I'd appreciate some advice and a gee'up to know that this is all do-able by myself.

THanks for reading my ramble.
Appreciated,
Jane

nomunnofun

Of course you can go it alone. However, it never fails to amaze that the one expense that could potentially save you the most money is invariably the first one to dispense with. The fee that you have quoted is very reasonable, not much more than, for example, the cost of a plumber for a repair. However, if you can submit and are confident of your ability so to do - go for it!

JaneyCakeLady

Thanks nomunnofun, following writing my query, I did think, hell I can put all the stuff to Accountant and he'll allow for the fee within my return. I guess I am attempting to avoid having to pay any money out at all with me having had some major outlays of late.

Yet if they can offset more pennies to reduce the tax payable, then it's worth it.

HeadAboveWater

I was self employed for a few years and did my own SA. Once I got my excel spreadsheet set up for income and expenses, and the total required for the SA, it was really straight forward. I didn't see a need to be forking out extra money (which I really couldn't afford!) for an accountant!

Pennywise

I think you have to look at the bigger picture.

Where a decent accountant makes the biggest difference is in long term tax planning. They can't really do anything for years that have passed as tax returns are historic. if you can do some google researching, you can easily find out what's allowable and what isn't and do it yourself. So, if you're doing your 11/12 SA return now, then, no probably not worth an accountant doing it. No point paying a professional just to write numbers in boxes!

But what about the future? That's where a good accountant is worth their weight in gold. Over the long term, an annual discussion with an accountant can really pay dividends. Things like transferring ownership between spouses, re-mortgaging to release funds tax efficiently, how to "tailor" your renovation plans to get the optimal tax relief (income tax now versus capital gains tax later at different rates), future capital gains tax planning, inheritance tax planning, etc., etc.

I've certainly got clients happily paying a couple of hundred pounds per year for me to fill in their numbers on their tax returns - they're happy to do that because each year we can have a brief chat about the recent changes in capital tax laws and how they affect the client, new opportunities for tax planning, etc. Every few years, it really pays dividends when they change something that will save them thousands in tax, yet costs them virtually nothing because it was just a five or ten minute discussion when we were working through the normal annual return. The kind of things that they'd never have even thought of looking for if they just did the number entry themselves - after all, you don't know what you don't know.

I wonder how you'd feel if, in say, ten years, you find yourself with tens of thousands of pounds of tax to pay, and then realise that doing something different many years earlier would have saved you half of it, or avoided it altogether!

Sometimes, it's the bigger picture that matters, not short-termism.

JaneyCakeLady

Thanks both.

Headabovewater - thanks, good to know someone else has been in similar circumstance.

Pennywise - appreciate and agree with the bigger picture scenario, where I had a currently complex set of assets etc. 11/12 was so straightforward I did it myself, as there was nothing of any complexity to deal with. I agree that long term planning is my goal, I'm trying to get a feel for what benefits using one for my 12/13 second year of SA might be, or would I be paying again for professional to fill in the boxes.

I've a wee bit of time to consider it for the 12/13 return.

I appreciate all advice.
Cheers

chrismac1

You pays your money and makes your choice. I've just filed a tax return for somebody else who also has a seemingly simple residential property let.

We're currently working on 2012-13 as he did not realise he was about to go into higher rate tax for the first time. By making a personal pension payment he can have a decent investment and avoid higher rate tax.

We've also put together a detailed list of all the costs of the property, and dates when it was his residence. He knows he needs to tell me well in advance if he ever is thinking of selling it. He now knows there is a potential capital gains tax bill but, with careful planning of the sale, this can be either greatly reduced or cancelled out entirely.

Was this lot worth £150 plus VAT? He thought so.

Conversely, I have helped other people to file their own returns for lower fees, just to make sure they'd put figures into the right boxes. HMRC forms are very poorly designed in my view, and in my experience less than 50% of the UK population put the right numbers into the right boxes without either spending ages on it or getting some guidance.

somethingcorporate

I'd suggest it is much better invested on an accountant than LA fees!

Personally, I do it myself for a single residential property but have done plenty of research so am comfortable with what I am submitting and am yet to pay any tax on the rental property and it is still generating a good income.

The more complex your affairs the more benefit a small investment in an accountant will be.

DavidSpeel

might be worth getting an accountant to do one year, and if they come up with any great tax saving ideas, then you know about them for next year when you go alone

Kynthia

I personally think that one rental property can be easily be dealt with by yourself as long as you do some reading and research. Keep records as you go along and do more research if your circumstances change such as you get married or plan to sell.

chrismac1

I have a client who earns well over £100k as the Finance Director for quite a large company. He jointly owns one rental property with his wife. He knows enough about tax to believe that he is better off getting it done properly - granted the cost involved is loose change to him.

On the other side of the coin, I also have various clients who previously did their own very simple self-assessment tax returns - one property, or one self-employment, that sort of thing. Easy so they thought.

Then the brown envelope arrived and the hassle started. One called me in tears over the threats - but it actually turned out that the £4k in tax they were demanding was all because of an almightly blunder she'd made, HMRC owed her nearly £1k!

Like I said earlier, you pays your money and makes your choice.