If you’re self-employed, have a second income or are a high earner, you’ll need to complete a self assessment tax return. The deadline is 31^st January every year for the previous financial year, and if you don’t file in time you can be left with hefty fines.

While you can do a tax return yourself, in many cases, you’ll save money if you hire an accountant to file yours for you. But how much will it cost? We’ll explain everything in this guide.

How much does a self assessment accountant cost?

An accountant who deals with self assessments will usually charge an average of £200, but you could pay £300 or more if your finances are complicated.

While that might seem like a lot of money for something that you can complete yourself, accountants who specialise in tax returns can help you be more tax efficient. They can help you understand all the different things that you can claim as allowable expenses. If you’ve missed out a lot of expenses on your return, it’s not uncommon to save at least what you’ve paid your accountant in tax.

Who needs to do a self assessment tax return?

The government says that you must do a self assessment tax return if, in the last tax year (6^th April to 5^th April), you:

• were self-employed as a ‘sole trader’ and earned more than £1,000 before taking off anything you can claim tax relief on

• were a partner in a business partnership

• had a total taxable income of more than £100,000

• had to pay the High Income Child Benefit Charge (usually if you receive Child Benefit and you or your partner have an individual income of over £50,000)

You may also need to fill in a tax return if you have untaxed income from things like tips and commission, a property you rent out or you receive income from savings and investments.

If you’re unsure, it’s best to get in touch with an accountant who will be able to tell you if you should complete a tax return.

How long does it take an accountant to do a tax return?

How long it takes an accountant to do your tax return will depend on how complicated your accounts are and whether you’ve kept them in good order – for example you’ve kept detailed bookkeeping records and organised your receipts. If your finances are relatively straightforward, an accountant should be able to calculate and file your tax return in 2 working days.

If your accountant needs to ask you for more information or query your receipts, it will take longer for them to do your tax return. Plus, if you have more complex finances, for example you have lots of income streams, it will take them longer to complete. That’s generally why accountants charge more to file your tax return the more complicated your finances are.

Will HMRC tell me if I need to do a tax return?

If you’ve registered for self assessment on the government website and you’ve opted in to HMRC’s email reminder service, then they should tell you that you need to do a tax return. However, you shouldn’t rely on this to remind you, as their emails could end up in your spam folder or may not even reach your inbox at all.

HMRC can also only tell you to do a tax return if you’ve told them that you’re a sole trader or need to file a return for another reason. They won’t be able to tell that you have untaxed income that you need to declare. But don’t use this as a way to get out of paying tax – there are many other ways that HMRC can find out that you owe income tax.

Is it easy to do your own tax return?

If you’ve got simple finances, it can be easy to do your own tax return if you’re confident with numbers. You can work out how much you have earned in the last financial year and what you’ve spent on your business, then take your expenditure away from your earnings to calculate your taxable income.

If you’re a sole trader or have a business partnership where no limited companies are partners, you can use HMRC’s simplified expenses. This allows you to calculate some of your business expenses using flat rates instead of working out your actual business costs, which can save you time.

However, you should check whether using simplified expenses suits your business. You may find that you can claim more in expenses by working out the actual costs. The government has a simplified expenses checker to help you decide.

If you don’t feel confident in filing your own tax return, you have lots of different income streams or your accounts aren’t very organised, it’s better to hire an accountant. They will ensure that your tax return is completed properly and help you avoid any penalties or prevent you from paying more tax than you owe.

Should I use an accountant for Capital Gains Tax?

Capital Gains Tax (CGT) is a complex area with lots of rules, so it’s best to use an accountant if you think you need to pay it. You have to pay CGT when you sell an asset that’s increased in value, such as a buy-to-let property. You only pay CGT on the gain rather than the entire amount that you receive.

It’s important to get your CGT calculation right as you don’t want to be left with a large bill if HMRC finds you haven’t paid enough, and you don’t want to pay more than you need to. It makes sense to use an accountant to help you pay the right amount of tax.

Can I claim accountant fees on self assessment?

Yes, you can claim accountant fees on self assessment – if you are self-employed. Accountancy fees, along with legal and other professional fees, can count as allowable business expenses, so your accountant will include their fees on the relevant self assessment tax return.

If you only have employment income but need to file a tax return, you can’t claim the accountant fees. This is because it’s seen as a choice to use an accountant rather than a necessity, so isn’t eligible for tax relief.

If you are employed but also have rental income or a partnership, you can claim an accountant’s fees on your tax return as long as you only claim for the amount that was spent on managing your other affairs, rather than your employment income.

Is it worth getting an accountant for self assessment?

We think it’s worth getting an accountant for your self assessment tax return. They will take the stress away from doing your tax return yourself, and ensure it’s filed well on time to help you avoid penalties.

An accountant can often pay for themselves in the savings you make on your tax bill. They know all the things that you can claim as allowable expenses and will make sure that you only pay the tax you owe.

If you’re ready to find an accountant for your tax return, HaMuch can help. We’ll put you in touch with our partner who will find you a qualified accountant in your area.

Estimates for common accountant services

Rates for other trades