For those who work in the UK, paying tax is a legal requirement. Although for the 2013/2014 financial year there will be a tax free personal allowance of £9,440 (currently the figure stands at £8,105 for those under the age of 65), you must ensure that you’re paying the correct amount of tax.
If you are employed by a company, then in most cases they will be able to arrange your tax deductions through a tax code. This should be clearly displayed on your wage or pay slip. However, those who work on a freelance basis will have to complete a self-assessment tax return form each year to detail and declare how much tax you owe.
As a freelancer, working out your finances can be a little tricky. You will need to keep a record of all payments, earnings, outgoings and transactions. This is where a professional chartered accountant can help you and here are five reasons why.
1) Get the Job Done Properly
With professional and expert advice, you will be able to submit your tax returns form on time without any delays. In addition, a chartered accountant can help you complete the form to the highest standard so that you don’t have to worry about further contact from HM Revenue & Customs (HMRC). Once it has been submitted, you won’t need to complete another form until the following financial tax year.
2) Avoid Receiving a Fine
A chartered accountant will know when your forms are to be submitted to HMRC. If you complete your own form but miss the deadline for both paper and online returns, then you will be hit with a fine. This penalty will increase the longer the tax return is not sent through to HMRC. As a business, you won’t want to incur any fines, especially if you have just started out. So to avoid this scenario, ensure the job is done correctly.
3) Focus on Other Business Matters
Running your own business or operating as a freelance contractor can be very demanding. Therefore, your time needs to be used in the best way possible in order to generate income. Besides sales, working on new projects, and responding to clients and customers, you will also have to carry out other admin duties.
However, to lighten this load, why not use a chartered accountant to keep track of your financial situation, whilst you focus your attention on other important business related matters. By doing so, you can still complete your tax returns and continue to push your company forward in the right direction.
4) Provide Further Advice and Assistance
An accountant will be able to pass on further advice for areas related to your financial situation. This could cause you to work with them on a more frequent basis and receive sound advice about what you could be doing to improve your finances. The knowledge that they provide can help improve efficiency within your business.
5) Improved Decision Making
With clear figures and a little expert advice, a chartered accountant can help you to make the very best financial business decisions. As the very nature of business is to build your company and achieve greater success, the choices you make will obviously have a bearing on your future.
You can only make clear decisions when the foundations are as solid and coherent as possible. From a financial point of view, this is where an accountant can again be invaluable.
About the author
This guest post was provided by AccountsNet, a professional Chartered Accountants who specialise in contractors accountancy services.