When Spending A Few Hundred Could Save You Thousands

For millions of British citizens, the Self Assessment tax return is an annoyance that must be completed every year. Self Assessment returns must be completed by those who is; self employed, earns over a £100k a year or has a large income from property or savings.

Because it's a bit of a drudge and because getting it wrong could have implications many of us choose to employ an accountant to help us with this yearly chore. Many don't, so you have to ask yourself why? Is it really worth the extra costs of paying someone to help, fill out a form?

The experts understand what can be claimed: Some Brits feel they have no other option but to employ someone with a full understanding of the tax process because they feel their own knowledge is inadequate. When speaking with The Independent Newspaper, John Whiting, head of personal tax at Price Waterhouse, said, "You might be able to spot things yourself, but getting your allowances and getting as many tax deductions as you can for your tax expenses, that's our value-added."

Speaking to the Daily Telegraph in 2007, self employed landscaper John Gilman, swears by hiring an accountant, "It is such a grey area knowing what I can and can't claim for when it comes to tax returns. I have considered going online, but it seems like the same hassle as filling out the paper forms."

Grinding, complex and takes time: If you haven't completed a self assessment tax return before then it can be a daunting task especially if you have even slightly complicated financial affairs (i.e. multiple income streams). Having straight records helps but if you are like me, then finding most of the information required takes time. It took me half an hour to find my NI number last week! Using an accountant, though costly, will save you all this kerfuffle, well most of it anyway. Also, if you use the same accountant year in year out they start to get a better and better understanding of your financial affairs, so the process often simplifies and improves.

The Guardian reported in 2007 that it is possible to complete your tax return yourself. "If you've got an appetite for the fine detail - such as establishing what expenses you can offset against your income - and are willing to put in the legwork, you can easily do it all yourself."

Definitely a job for the detailed and well organised. If your idea of an organised file is, knowing whereabouts in the shed, the shopping bag full receipts is. If you think a spreadsheet is something you take on a picnic, then this maybe the time to call in the professionals.

Keep your hard earned in your pocket: Ironically, hiring an accountant could actually save you a bit of money, as crazy as it sounds! The Guardian further reports that "a good accountant will almost certainly recoup the cost of the work they do for you in the efficiencies they make in your financial affairs". It may surprise you to know that the main reason people do hire an accountant is to save them money.

If you have different sources of income it may well be advisable to set up a Limited Company and receive dividends. This may reduce your tax liability but the person to advice you on this would be an accountant. If this works then the benefits of the advice far outweigh the costs of the advice in the first place.

The most basic services from an accountant will only cost around £150-£200. Not only will you be free from the nightmare of balancing the books, but by utilising the accountants' expert knowledge, you can tweak your business so you can reduce your overall tax liability.

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