UK question about accountants, can they save you on your tax bills?
and if so how exactly, do they cook the books? I think I am going to be stung for a genuine mistake on my tax return because I put something in the wrong column. The inland revenue have now got all the correspondence and are looking into it. It's a glaring mistake they should have spotted at first but now a year later they are querying it. People are advising me to get an accountant but I don't know how an accountant can exactly help me in this situation or for the future. Any experiences with taxman or accountants would be useful please. I am just a small business trying to survive.
United Kingdom - 4 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
Well, an accountant wouldn't have made the mistake, so they are worth it. The do not cook the books, but know all the legal loop-holes that you don't to reduce your tax bills.
Answer 2 :
It's all down to what you're good at. HMRC is staffed mainly by people with limited knowledge - they've only been taught to press button B if there's a tick in box A. An accountant should understand the whole picture, make sure you're paying the minimum amount of tax and stop the cretins getting away with overcharging you. I don't know what your business is, but it's probably one your customers could do for themselves - it's just you do it better and quicker. Think the same about accountants.
Answer 3 :
One thing is for sure. If you have made a genuine mistake the Inland Revenue are quite understanding about it. They even admit that completing a tax form is something which they would not be able to do unless they had special training. Back to your question. I hired an accountant and it cost me £2,000 plus for about 90 minutes work. So I asked for a break-down, which they didn`t like! And it took them two weeks to do it. When I got it back they had charged me a minimum of £15 per phone call - that was in 1989, and £90 per hour for a qualified accountant to look at my figures; £35 per hour for one of their staff to look at it etc. A typical phone call went like this: Hi, Monty, how`s things down your end? Oh, not too bad. You? About the same here. Right, what was it you wanted? Ah! About this invoice, did you etc etc etc? Oh, no. It was blah blah blah and so on. OK Monty, nice talking to you again. Yeah, you too. Bye Bye Time taken - at £1 per minute - less than 2 minutes, time charged £15. When I first asked them to take me on I asked what their charges were and was told, "Oh, just a bit more than £35 or so." No mention of anything else. I also had a friend who was an accountant; one day he took someone`s accounts home, 30 mintues later he had completed them but, to eke it out, every time he knew he would pass the client`s house he took an invoice with him, called in, queried it, and six weeks later sent in his bill of £175. That should have put me on my guard, let`s hope it puts you on yours.
Answer 4 :
yes, an accountant will claim for everything under the sun in order to keep your tax bills down. plus they wont make mistakes on returns like the one you have as its mostly done by computers these days and then printed off for signature, or submitted electronically, with a signed copy retained on your file. the problem here is that the taxman will enquire further into your affairs depending on what they are looking at. there are diff types of enquiries, where they can look at your affairs in general, or focus on a specific area. in this situation, the accountant can only advise on what to let the tax man see. the tax man can only ask for certain things at certain times, but they will try it on and the average joe (yourself) will not know what they can ask for so you would just let them see it. also they maybe able to correct your return and also claim for additional things that you havent claimed for, thus reducing your tax bill and any interest and penalties due. at the end of the day, its your mistake, they wont punish you more than normal, what they will do is make you pay interest on the additional tax due, plus a 5% surcharge on the extra tax due as it wont of been paid by the due dates. the tax man isnt paid to look for mistakes in your return as its self assessment, plus the guys there that load the info onto their computers only get paid in bananas and peanuts so they are not the smartest lot on the planet. any additional tax due can be paid over a period of time, but interest will be payable still. I would get an accountant just to check everything over and see what the tax man is saying you owe is correct and get them to do future years. its better to pay an accountant so you sleep better at night knowing that your affiars are in order. as for montys comment above, accountants used to be like that. nowadays they offer a fixed fee service and let you know exactly what they will do for that fee. anything extra they will contact you to discuss it and agree and extra fees payable. you also can get a free 1 hour consultation to go over the general bits and discuss you problem with them. best bet is to get one that has good word of mouth, try asking fellow business owners or friends who have em and see what response you get.
