Freelancer filing own tax returns - is this easy?(22 Posts)
DH and I are both freelancers and have always had an accountant to fill out tax return forms, though we provide them with all info such as how much spent on transport, etc.
I haven;t worked this financial year since having DD, so it's just DH this year. As I'm not working and have a bit of time on my hands am thinking about saving teh normal £700 we pay the accountant to file our own tax returns. Just wondered if anyone else does this and is it easy?
have a look over a previous return and see if you can tally it all up with where the information came from, if you know what I mean.
I know that when I look at ours, it isn't that obvious!! And we provide a lot of detail!!
In our case, I'm confident that the £750 we pay saves us a bit in tax as she know best how to present the figures.
Good luck if you give it a go.
I used to do DH's tax returns and it was fairly straight forward as long as you are organised with your paperwork and there are no complicated tax issues.
If you have time on your hands go for it - there are lots of books available that can help you, and the inland revenue can answer questions too (as long as you don't mind hanging on the phone, being passed around 5 different offices )
Had thought of that but we have never been given a copy of any of our previous tax returns.
Meemar - that's what I was thinking. have time on my hands and feel slightly guilty that I haven;t brought in any income this year so wanted to show I was of some financial worth
I used to have an accountant who charged me £50 to do my v.straightforward return when I was freelance. £700!!!
If you are providing the information in a comprehensible and complete format, then £700 sounds too expensive for filing one tax return (and presumably producing a P&L and B/S for you), so I would at least shop around for another accountant.
It depends how complicated your income and outgoings are - mine are very straight forward so I do it myself.
FD, I did do my own tax returns for a while, but my job (a series of quite long contracts each year and nothing too difficult to claim) made it quite easy. So it is possible...
Fast forward, and DH and I are both freelance, and both use an accountant now. And I'm mostly at home with DD and so not working much. I feel I should be doing something useful too, but am loath to lose the accountant.
So what I do is all DH's paperwork - keep a check on invoicing and what's been paid, and prepare a regular spreadsheet of where he is financially (he invoices for loads of jobs a week, 10 or more). So we save money, as the accountant charges less as all the info is easy for him to find. Might that work for you?
And, btw, you are of financial worth being at home. And, more important than that, of social and emotional worth.
I thought £700 was cheap!
Our previous accountant charged £1200!
I am in London though ...
Blimey Deviant... My dp runs a v.complicated business with all sorts of paperwork to take into consideration etc and his accountant charges him £420!!
Just cos you live In London, doesn't mean your accountant can't come from, say... Notts!! Get a courier and send it up here!
I used to file my own taxes online and found it easier than I expected, because the online system prompts you for the information.
I now have an accountant purely because when we wanted to extend the mortgage our bank wanted to see proper accounts from a proper accountant and I thought it was an investment against a time when we want to move house.
However, I will probably do them myself when that's no longer an issue. I pay a flat rate of about £400 a year, by the way, my DH also.
Was thinking about how it would effect any remortgage of the flat (once our fixed rate runs out next year). ... Ummm, might just have to look for an accountant outside London.
In the meantime, just phoned up HMRC and they are sending us copies of our tax return forms from last three years so I can at least have a look to see how figures tally with info I provide, and will also be a template for any tax return form I might fill out myself.
I really think that unless you have some complicated issues going on you should do it yourself. It gives you an idea of what is going on with your money and helps you plan for the next year, and i think you can pay less tax. Not by being "deviant" but just by understanding your own business, A friend of mine appeared to me to be paying far to much tax after earning nect to nothing and she was going through an accountant.
I have someone who inputs for me every quarter for £50, so I then have everyting ready to sort out for the return without the tedium of sorting through the receipts. £200 year! So maybe what you should be paying for is a BOOK KEEPER, rather than an accountant?
Break it down, INCOME, take away EXPENSES and what's left over, YOUR PROFIT
Whilst I wouldn't use the word EASY, I would say that its pretty straightforward.
I have done dps since the online thing came in and since being self employed myself the last 2 years I've done mine too.
As long as you keep all receipts and figures you will be fine. You can ring the help desk number on the tax return reminders or HMRC website and they are sooooo patient, will advise you on just anything. If you ring up at a quiet time they will go through every box and entry with you and advise what should go in that.
at the end of it when you've put all your income and expenses in, it instantly calculates how much tax and ni you need to pay, and you can go and pay online straight away. Thats what we do.
Oh, there is a bit of faff where you have to get the accountant removed as your appointed representative to do the online stuff (its very secure) and you won't be able to ask any specific questions about his tax or tax return without him giving permission in writing (I think, or giving permission in some prescribed form) to HMRC.
I do have an HNC in business studies from donkeys years ago though so perhaps I find it more straightforward/less frightening than a lot of others might?
DP used to provide an accountant with all the figures, then the bloody accountant charged him £250 + vat just for filling the tax return online!
However, we are just self employed and not earning a lot. Once you go into higher tax bracket or you have employees, premises, importing or anything then I personally would use an accountant and get the best accountant I can afford.
For now its just money in, receipts for bits of things purchased, car expenses and thats about it.
Before dp moved in, when we had completely separate finances I used to make him give me the £250 instead of the accountant
Thanks for the advice.
palacestreet - I like your thinking, but I'm FeelingDeviant about something else, not about accountancy!
Can't you inlcude teh cost of the accountant into your expenses anyway? Or did I dream that?
FeelingDeviant, I'm in London too and have just got rid of one accountant who charged what I thought was an extortionate £500 and found one (well, several actually) who charge c.£150. Admittedly I'm almost in Croydon so it's cheaper than central London, but I do think you're paying way over the odds. Definitely shop around a little further afield and see what you could save. Many of my friends in London have accountants back in their hometowns as they're much cheaper too. IMHO I think paying for the legitimacy of accountant's stamp is well worth a couple of hundred quid, as well as it being less hassle for you than doing it yourself. But then I'm dreadful at maths.
I am an accoutant and am often at how much people pay. If your return is simple then do it yourself. The forms have got better this year. Beware though that this years return is different to last years.
Sometimes it's the clculation o fthe tax that's the hard bit. The HMRC form gives at ridiculously complicated way to do this. Mainly because they are trying to give even the most complicated returns a way of doing it themselves. But if you file the returns before 30 September HMRC will calculate the tax for you anyway.
Also be aware that if you are filing online you need to register with them first , it takes a while to get the passwords etc. So do that asap.
And finally, HMRC have changed the deadline for filing a paper return, i can't remember if it's end of Oct or Nov I think it's Nov. It doesn't matter to us since we file most of ours online and the deadline for those is still 31 jan.
and a little aside, I am in Kent and we do a fair few Londoner's returns as i think London accouants will generally charge more. Everything can be done by post/phone/email so there's no need to use a local accountant. Unless you need to go and see them alot.
hey guys, reading all your messages seems like your paying way over the odds for the accountants.
ive just started out freelance doing peoples tax returns and also trying to offer other services such as book keeping.
i would offer a initial flat rate of £180 and then after seeing how good the records are kept maybe creep it up a little depending on the time it takes to sort.
also book keeping, the services would start from £30p/m but would need to discuss prices if your business is larger. for the £30 a month i would generate monthly profit and loss accounts and monthly balance sheets and would also advise on how much to save/pay towards your tax bills.
which if you was to use the book keeping service then i would charge no where near the original price for a tax return been filed.
if any body is interested please email me on: firstname.lastname@example.org
thanks in advance,
If you do it online, it tells you how much you owe at the end- the hard part is actually writing the cheque and sending it off!
If you do it online, you don't even need to write a cheque as you can set up a transfer!
I'm a tv producer with several long contracts a year; my expenses aren't super-complicated, just car, food, phone, computer etc, but I found the online service soooooo easy to use.
As mentioned before, the telephone helpline actually works like an accountant for you -- they answer all your questions and help you do the calculations. I got a bit confused over capital allowances, so I literally just told them when I bought my car and how much for, and they told me what to put in the box. I honestly don't think an accountant could save me more, as I claim for everything I possibly can (they'll tell you what is allowable too).
I think you just need to be prepared to be a bit cheeky and use the phone lots!
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