Do I need an accountant?
January 28, 2005 2:53 AM Subscribe
Do I need an accountant? [MI]
I work 3 days a week salaried, PAYE etc.
The rest of the time, I'm self employed as a musician.
All the tax stuff seems fairly straightforward to me, and I'm not getting caned for tax (in fact I've had a rebate two years in a row), but my general organization skills are poor (at best) and it strikes me paying an accountant would be much easier. However, the few options I've looked at seem prohibitively expensive.
I work 3 days a week salaried, PAYE etc.
The rest of the time, I'm self employed as a musician.
All the tax stuff seems fairly straightforward to me, and I'm not getting caned for tax (in fact I've had a rebate two years in a row), but my general organization skills are poor (at best) and it strikes me paying an accountant would be much easier. However, the few options I've looked at seem prohibitively expensive.
Response by poster: Fairly unpredictable; probably atound GBP 10k this year from the music.
posted by monkey closet at 3:37 AM on January 28, 2005
posted by monkey closet at 3:37 AM on January 28, 2005
Well, as a general rule, I'd usually say that if you _think_ you need an accountant, then you should generally hire one, just for peace of mind.
On the other hand, the underlying argument, in most cases, is that a good accountant can often save you more than you'd pay, by confidently and aggressively looking for deductions, etc.
In your case, that's not necessarily the case, so it's a harder call. In the US, there's a cutoff between folks who use the "easy" form, and folks who have to use the much more complex "standard" form--basically, whether or not you need/want to take itemized deductions--and that's also a good rule of thumb for whether an accountant can really help. I'm not sure whether there's a parallel set up for you, but generally, I'd say that if you don't need to itemize deductions, don't bother hiring an accountant. If you've got to go through the process of deciding what deduct for professional expenses, etc., then you should seriously consider one, since they can almost certainly get you more back than you would on your own (and save you a lot of grief).
posted by LairBob at 4:30 AM on January 28, 2005
On the other hand, the underlying argument, in most cases, is that a good accountant can often save you more than you'd pay, by confidently and aggressively looking for deductions, etc.
In your case, that's not necessarily the case, so it's a harder call. In the US, there's a cutoff between folks who use the "easy" form, and folks who have to use the much more complex "standard" form--basically, whether or not you need/want to take itemized deductions--and that's also a good rule of thumb for whether an accountant can really help. I'm not sure whether there's a parallel set up for you, but generally, I'd say that if you don't need to itemize deductions, don't bother hiring an accountant. If you've got to go through the process of deciding what deduct for professional expenses, etc., then you should seriously consider one, since they can almost certainly get you more back than you would on your own (and save you a lot of grief).
posted by LairBob at 4:30 AM on January 28, 2005
If it is primarily tax stuff you're interested in, is there an intermediate step available to you? In North America we have H&R Block (and about a million smaller, similar services) that will do your taxes for you for a fee that varies from smallish to mediumish but gets nowhere near the cost of an accountant.
posted by jacquilynne at 5:23 AM on January 28, 2005
posted by jacquilynne at 5:23 AM on January 28, 2005
Well, it depends what your problem is. If you're having trouble tracking your income, I don't think an accountant is going to help you- you just need to be better organized. Not sure what exists in the U.K., but if there's an equivalent to TurboTax Online, that makes entering all that info a snap.
If you're more concerned about maximizing your return and figuring out what you can/should deduct, than yeah, go get an accountant. And save everything.
posted by mkultra at 6:30 AM on January 28, 2005
If you're more concerned about maximizing your return and figuring out what you can/should deduct, than yeah, go get an accountant. And save everything.
posted by mkultra at 6:30 AM on January 28, 2005
I work for one of those previously mentioned tax companies (the big one is actually worldwide, not just North America), and a return like that is actually a lot less complex than you think (unless UK tax law is even worse than the behemoth that is US tax code).
We have pretty useful record books for clients to keep track of their expenses, mileage, and so on, but I've also had people who just hand me an envelope stuffed with receipts for the year. I'd imagine our UK offices or a similar service do the same.
I second keeping everything. IME, most people err on the side of caution with their taxes because they're terrified of an audit or penalty, and miss deductions they would be legally entitled to.
Even if you do your own taxes, it's always nice every few years to sit down with a pro, since there may be new credits or deductions they know about that you've missed. Clearly, however, I have a bias. ;)
posted by Kellydamnit at 8:00 AM on January 28, 2005
We have pretty useful record books for clients to keep track of their expenses, mileage, and so on, but I've also had people who just hand me an envelope stuffed with receipts for the year. I'd imagine our UK offices or a similar service do the same.
I second keeping everything. IME, most people err on the side of caution with their taxes because they're terrified of an audit or penalty, and miss deductions they would be legally entitled to.
Even if you do your own taxes, it's always nice every few years to sit down with a pro, since there may be new credits or deductions they know about that you've missed. Clearly, however, I have a bias. ;)
posted by Kellydamnit at 8:00 AM on January 28, 2005
You might have a look through the Inland Revenue's site, especially with regard to 'self-employed' and 'self assessment'. It may well turn out to be simpler than you expected.
posted by biffa at 8:40 AM on January 28, 2005
posted by biffa at 8:40 AM on January 28, 2005
I'm a CPA (that's similar to a chartered accountant over on your side of the pond), and it doesn't really sound to me like you need an accountant. Paying an accountant to organize things for you is a waste of money. Paying an accountant to interpret the tax law or file forms that you can't figure out is a reasonable use of money, but if the accountant has to do your organization for you, he's going to charge you a lot for something that someone with a good deal less skill could do.
I don't know anything about the UK tax law, so I could be off base on this, but what you want is something more like a bookkeeper, which is basically an accountant who has less specialized expertise and charges less. Or, preferably, just someone to show you how to get organized. Someone at one of the big chain tax preparation shops may be able to do that for you, but be careful. Some are much better than others, and some of them charge an awful lot for what they do while others are very reasonable.
posted by anapestic at 11:04 AM on January 28, 2005
I don't know anything about the UK tax law, so I could be off base on this, but what you want is something more like a bookkeeper, which is basically an accountant who has less specialized expertise and charges less. Or, preferably, just someone to show you how to get organized. Someone at one of the big chain tax preparation shops may be able to do that for you, but be careful. Some are much better than others, and some of them charge an awful lot for what they do while others are very reasonable.
posted by anapestic at 11:04 AM on January 28, 2005
This thread is closed to new comments.
posted by biffa at 3:23 AM on January 28, 2005