is it worth employing an accountant?

[cabbageroses]

I am p/t, s/e freelance and my income varies considerably from around £17K to possibly £25 .
I have always done my tax return myself, but wonder if it is worth having an accoutant do it? My income for 2010-2011 will be nearer the higher figure.

I am not claiming for any use of my home. electric etc etc. as then it becomes dodgy re. capital gains etc.

If an accoutant woould charge me say £400 for doing the return, what are the chances of saving this in tax owed?

Also, re. the turning into alimited company- is this an option? Other people have told me that it's not worth it unless youearn around £40K.

I would definitley find a good accountant - they are worth thier weight in gold. We had a rubbish one for years and it ended up costing so much stress. Then we found a really good one and he has saved us loads - they know stuff that you never would and can give really good advise.

But aren't they ALL going to say they can save me money and then i will not actually know until the sum are done????

They are not realistically going to turn me away, are they?

I used an accountant this year - and I don't thinkhe saved me any real money.I used him because dh does, and his affairs are a bit more complex - but in some aspects our affairs are joint - so it was important they were the same on both returns iyswim. but I don;t think I'll bother next year

Who needs an accountant - when you have mumsnet!!!!

OP
if I did your return I would charge you around £200
and for a start would get you to read this
members.ebay.co.uk/ws/eBayISAPI.dll?ViewUserPage&userid=talkinpeace
and if you are not claiming the infamous £156 etc
then you WILL benefit from the attentions on expert

For that level of income I would advise a properly qualified Bookkeeper. They will likley charge a lot less than an accountant but do have proper qualifications.

My BIL is a qualified Bookkeeper and has passed all the relevant exams and is a member of the Institute of Certified Bookkeepers. He does a good job and recently sorted out a set of sole trader books and tax return that an accountant had made a right mess of.

Go to this at the ICB to look for local bookkeepers. Make sure they have the relevant level of qualification to do what you want.

I tend to agree its not worth setting up a Ltd company for that level of income.

My accountant charges about £200 but he is worth it as I'd make a hash of it myself and don't want to be in trouble with inland rev!!

A really good accountant can save quite literally thousands as a small business owner just with the correct advice on how to lay out your accounts. Personally my accountant saved me around £3000 on my tax bill over the last 2 years as we invested money in a new business venture.
Ask about what type of businesses they cover my accountant works only with medical businesses so her knowledge is excellent. Again setting up a limited company is not always the best thing one of my businesses turns over over £750,000 ex VAT, but for various reasons this is better tax wise as an LLP rather than a LTD.

Book keepers are great at keeping books
but when it comes to taking a strategic view of tax planning and business options, there is a reason by the CCAB qualifications are the valued ones by business and HMRC.

you need to talk to an accountant - ask around to get some recomendations - and remember, anyone can call themselves an accountant (and there is some real shit out there!!) a good accountant WILL SAVE YOU MONEY - make sure they are qualified and covered by an organisation and have indemnity insurance - book keepers are NOT accountants and generally do not have the required insight regarding tax planning, allowances etc so it can be false economy - a good accountant will advise and assist with you setting up a book -keeping system that suits you and them, this will save money in the long term - regarding a LTD company again, a good accountant will advise you - it is not always simply to save tax that you may consider a LTD company

The clue is in the name, BeenBeta.
Book-keepers keep books. They are not necessarily tax experts.

there is advice about how to choose an accountant, which letters to look for and options on company structures in my ebay me page that I linked to above....

I'd also not recommend a bookkeeper for tax returns. My DF used a bookkeeper for years very successfully, until he chose to incorporate (for non-tax reasons). The bookkeeper completely screwed up all subsequent tax returns with absolutely basic errors - for example the bookkeeper continued allow DF to take drawings from the business .

I'm an international tax policy adviser, and it took me weeks to sort out DF's tax affairs.

I was earning similar amounts to you and did employ an accountant, most of the time I gave him my set of figures and he did the tax return. This year I did it myself as I've subsequently stopped trading, didn't earn as much and didn't want to pay someone. With a bit of time and patience I've managed to do my tax return by myself.

I'd say overall that it is worth getting an accountant, but make sure you are clear on what their charges are going to be. I had an agreement that if anything I asked about was going to incur an extra charge over the amount we'd agreed annually then the accountant had to make it clear in advance of doing any work.

I'm not going to comment on the main question because I am biased :)

But as to limited company vs self employed, basically with the limited company you save yourself National Insurance - which on £17k of earnings in 2011/12 is just over £1000. You would pretty much have to have an accountant to produce the accounts and company tax return though which would eat up the lions share of that.

But at £25k you could pay over £1,700 less in tax and NI, which should leave you over a grand better off after paying for a basic accounting service.

Although I know nothing about your individual circumstances, your statement about capital gains tax is, in general, wrong.

Another point worth mentioning is that if you do ever get a tax enquiry- this is basically a check into the records behind your figures- then HMRC inspectors sometimes tend to take advantage of the fact that you don't have full knowledge of tax and they can end up telling you certain costs etc aren't allowable and charging you extra tax and penalties. A decent accountant will know the rules and will argue back and tell HMRC they are wrong in cases where they are.

This would depend on how complicated your affairs are.

Agree with Morph. Depends on how complicted your affairs are. I am a ACA part qualified accountant and have seen so many hashes over the years, its frightening.
But as anchovy says, you comment on uoh re cap gains is just nonsense.
Get a few quotes and then come back to MN for some more advice.