Do i need a Tax Advisor / Accountant?
Discussion
Hi All, So as ridiculous as this seems as a place to ask, i'm sure i'll get some decent answers on here for this!
I'm in a fortunate enough position that for last tax year 2016/2017, i went over the threshold for employed individuals to have to complete a self assessment tax return.
I had a go at filling it in myself, but it dawned on me that i don't know any of the specifics or what sort of things i could potentially claim for. (I'm in a sales role and do a lot of traveling abroad, working from home etc).
So i'm wondering if it's worth at this stage, me procuring the services of an accountant to assist with this? I know this is the route that the self-employed take. But can they be of any assistance to someone filing a tax return based on one source of income in full time employment?
If it further cements the case, this tax year i'm projected to double last years earnings again, and am now on all sorts of funky emergency K1 & M tax codes. (I say this in case it changes things and may be worth getting someone in to look at the whole picture).
Thanks in advance!
I'm in a fortunate enough position that for last tax year 2016/2017, i went over the threshold for employed individuals to have to complete a self assessment tax return.
I had a go at filling it in myself, but it dawned on me that i don't know any of the specifics or what sort of things i could potentially claim for. (I'm in a sales role and do a lot of traveling abroad, working from home etc).
So i'm wondering if it's worth at this stage, me procuring the services of an accountant to assist with this? I know this is the route that the self-employed take. But can they be of any assistance to someone filing a tax return based on one source of income in full time employment?
If it further cements the case, this tax year i'm projected to double last years earnings again, and am now on all sorts of funky emergency K1 & M tax codes. (I say this in case it changes things and may be worth getting someone in to look at the whole picture).
Thanks in advance!
After 24 years it is still a mystery to some as to when or why a person suddenly has to start completing Self Assessment tax returns.
The common reason is when a person has a source of personal income that cannot be taxed correctly at source or taxed at all at source.
So, that includes -
buy to let landlords
sole trader/self employed income
business partnership income
dividend income from limited companies exceed £5,000
bank interest over £1,000
someone who needs to declare a capital gains tax related transaction (there does not have to be a capital gain for the requirement to declare the transaction)
In theory, a person who's income is correctly taxed at source should never have to complete a tax return. In practice, the procedures required to get all the agents involved (employers, pension providers, HMRC themselves) to work together to collate the relevant information for this to be achieved are lacking and therefore the only way to get it right is for the taxpayer to complete a tax return
HMRC intends to abolish self assessment. It was going to happen on 5 April 2018 but has been postponed until at least 2020 now.
The common reason is when a person has a source of personal income that cannot be taxed correctly at source or taxed at all at source.
So, that includes -
buy to let landlords
sole trader/self employed income
business partnership income
dividend income from limited companies exceed £5,000
bank interest over £1,000
someone who needs to declare a capital gains tax related transaction (there does not have to be a capital gain for the requirement to declare the transaction)
In theory, a person who's income is correctly taxed at source should never have to complete a tax return. In practice, the procedures required to get all the agents involved (employers, pension providers, HMRC themselves) to work together to collate the relevant information for this to be achieved are lacking and therefore the only way to get it right is for the taxpayer to complete a tax return
HMRC intends to abolish self assessment. It was going to happen on 5 April 2018 but has been postponed until at least 2020 now.
nick s said:
I had a go at filling it in myself, but it dawned on me that i don't know any of the specifics or what sort of things i could potentially claim for. (I'm in a sales role and do a lot of traveling abroad, working from home etc).
If your expenses are refunded by your company then you can't really claim for anything much. In theory you can claim the actual cost of working from home but it's a can of worms and our firm pays an agreed with HMRC tax free allowance of £4/wk. Some companies have agreed daily allowances - ours won't do that but is very good at refunding expenses without quibble. But these are employer things, rather than HMRC.
There is no statutory income limit that dictates whether Self Assessment is required. However, the tax rules are now so complex regarding what happens to personal allowances and child benefit when income goes over certain thresholds that the only way to ensure a person ends up paying the correct tax is to complete and submit a tax return.
HMRC are trying to get away from the complex mess they have created but are finding that even they can't cope with the utter shambles that is now personal tax in the UK.
HMRC are trying to get away from the complex mess they have created but are finding that even they can't cope with the utter shambles that is now personal tax in the UK.
The gov.uk website states that:
You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
Whether this is enforced or well known is a question for another day!
Anyway - I think we're digressing from the OP's question so I'll leave the advice to others!
You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
Whether this is enforced or well known is a question for another day!
Anyway - I think we're digressing from the OP's question so I'll leave the advice to others!
GR_TVR said:
The gov.uk website states that:
You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
Whether this is enforced or well known is a question for another day!
Anyway - I think we're digressing from the OP's question so I'll leave the advice to others!
They do enforce it. A few years back they tried to fine me for not submitting a SA for precisely this reason.You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
Whether this is enforced or well known is a question for another day!
Anyway - I think we're digressing from the OP's question so I'll leave the advice to others!
GR_TVR said:
The gov.uk website states that:
You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
Whether this is enforced or well known is a question for another day!
Anyway - I think we're digressing from the OP's question so I'll leave the advice to others!
You would be surprised the amount of stuff that HMRC puts on their website that is not supported by any underlying legislation. This is just a guide. It is not the law.You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
Whether this is enforced or well known is a question for another day!
Anyway - I think we're digressing from the OP's question so I'll leave the advice to others!
GT03ROB said:
They do enforce it. A few years back they tried to fine me for not submitting a SA for precisely this reason.
Had they already written to you telling you to submit a return?If they did and you failed to submit the return, then they can raise a penalty.
They can only fine you if you had not submitted a return when you were required by law to submit one.
You say they "tried to fine you". Did they succeed in making you pay? If not, on what ground did they cancel the fine?
GR_TVR said:
FreeLitres said:
Erm, do you mean you went over the 40% tax threshold?
If you are in a regular PAYE job, you don't need to do a tax return unless you have incomes from other sources as far as I know.
Over £100k requires self assessment, AFAIK.If you are in a regular PAYE job, you don't need to do a tax return unless you have incomes from other sources as far as I know.
GR_TVR said:
The gov.uk website states that:
You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
Whether this is enforced or well known is a question for another day!
Anyway - I think we're digressing from the OP's question so I'll leave the advice to others!
It is indeed enforced! I'm not doing it by choice. HMRC have written to me telling me so.You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
Whether this is enforced or well known is a question for another day!
Anyway - I think we're digressing from the OP's question so I'll leave the advice to others!
Edited by nick s on Wednesday 8th November 09:25
nick s said:
It is indeed enforced! I'm not doing it by choice. HMRC have written to me telling me so.
Had they written to you previously telling you to complete a tax return i.e. did you get the formal "Notice to Complete a Return" letter?Edited by nick s on Wednesday 8th November 09:25
GR_TVR said:
The gov.uk website states that:
You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
The >£50K (for you or partner) and one of you claiming child benefit must catch a lot of people. You’ll need to send a tax return if, in the last tax year:
your taxable income was over £100,000
https://www.gov.uk/self-assessment-tax-returns/who...
The basic premise behind self assessment is that it is there for people whose tax affairs cannot be handled correctly by normal "tax deducted at source" methods. There are no statutory upper or lower income thresholds that make the submission of a tax return compulsory.
HOWEVER, due to the very complex nature of how tax bands, thresholds, benefits and tax credits are all now interlinked, HMRC ASSUMES that people under or over certain levels of income might need to complete a return. THAT is why they have stated this "£100,000" amount on their website. There are many people who have salaries over £100,000 who have no need to submit a tax return because the PAYE system taxes them correctly anyway.
If HMRC contacts you by sending you a formal "Notice to Make a Return" letter then you should, in theory, submit that return in accordance with that notice. You can appeal if there are grounds to appeal.
Originally, there was no way you could appeal such a notice. Now you can. So, if your income is over £100,000 AND you get one of those letters, you MAY be able to appeal against having to submit a return on the grounds that you have no other income that has not been taxed correctly and that you have already paid the correct tax on the salary under PAYE.
Another lie on the HMRC website is the statement that directors of limited companies are obliged to submit Self Assessment tax returns. They are not. Many directors of course, do need to complete returns but it's not because they are directors. It's for the reason mentioned in the fist sentence above - their affairs are not straightforward.
HOWEVER, due to the very complex nature of how tax bands, thresholds, benefits and tax credits are all now interlinked, HMRC ASSUMES that people under or over certain levels of income might need to complete a return. THAT is why they have stated this "£100,000" amount on their website. There are many people who have salaries over £100,000 who have no need to submit a tax return because the PAYE system taxes them correctly anyway.
If HMRC contacts you by sending you a formal "Notice to Make a Return" letter then you should, in theory, submit that return in accordance with that notice. You can appeal if there are grounds to appeal.
Originally, there was no way you could appeal such a notice. Now you can. So, if your income is over £100,000 AND you get one of those letters, you MAY be able to appeal against having to submit a return on the grounds that you have no other income that has not been taxed correctly and that you have already paid the correct tax on the salary under PAYE.
Another lie on the HMRC website is the statement that directors of limited companies are obliged to submit Self Assessment tax returns. They are not. Many directors of course, do need to complete returns but it's not because they are directors. It's for the reason mentioned in the fist sentence above - their affairs are not straightforward.
Eric Mc said:
GT03ROB said:
They do enforce it. A few years back they tried to fine me for not submitting a SA for precisely this reason.
Had they already written to you telling you to submit a return?If they did and you failed to submit the return, then they can raise a penalty.
They can only fine you if you had not submitted a return when you were required by law to submit one.
You say they "tried to fine you". Did they succeed in making you pay? If not, on what ground did they cancel the fine?
GT03ROB said:
They had written to me telling me I didn't need to submit a return as my affairs were straightforward. They raised & issued a fine on the basis of my income exceeding 100k for that year. I wrote back objecting to this on the basis that my salary & bonus for the year was less than 100k, but that on checking it turned out I had a week 56 payment which tipped me over the 100k for the tax year.
If that is the only letter they wrote then they were in the wrong and you had very good grounds for an appeal.It's not unusual for HMRC to write a letter to someone saying they don't have to submit a return and then , a coupole of weeks later, write another letter saying they do.
Give me a bell if you want any further advice on this because it could be HMRC were acting above their powers here.
YHM
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