Disclosure – this is a collaborative post.
Doing your taxes is one of the least exciting things about starting your own company, but every business needs to do it. The question is, do you need to hire a professional accountant to do it for you?
This is a tricky one because, even though accountants make the process much easier and they could find ways to save you money, it’s also an added expense that you have to cover. New businesses only have a limited amount of cash to play with, so cutting costs and doing your own taxes could be a good move. On the other hand, any mistakes could be costly. So, should you hire a professional to do your business taxes?
Do You Understand Your Tax Return?
How much do you really understand what’s on your tax return? Basically, the less you understand, and the more mistakes you’re making, the more you should consider hiring an accountant.
If your return is a complicated one because of any factors such as having employees or working in multiple locations, then it’s probably worth paying a professional to ensure there are no costly errors. But if you are a small business with one or two people and a relatively low income, it’s easier to handle things on your own.
It’s vital that you understand what information you need to put on your tax return and how to do your business expenses. If you don’t find out what you can claim on your business taxes, you could be paying more than you need to. So, if you do decide to do your own taxes instead of hiring a professional, make sure to do your research so you actually know what you are doing.
Do You Need To Pay VAT?
If you’re a small business and your taxable turnover is less than £85,000, then VAT will probably not be an issue for you. But if it is and you need to register for VAT, the term “turnover” means more than just the money you make from selling goods or services. It also includes any other income such as investment returns and any money you make from selling assets.
If your turnover is more than £85,000 a year, then VAT could be a huge expense for you if you aren’t taking advantage of the exceptions available for small businesses. Keeping on top of VAT can be complicated, so hiring an accountant can really help to get things right and avoid any overpayments.
Could You Use Accounting Software?
If you need help with your tax returns and you don’t want to hire an accountant because of the expense, then there are some great online accounting software options. The best companies offer solutions that include everything from invoicing to payroll and inventory management. This means you can track all your sales, expenses and stock online in one place instead of spreadsheets.
Some of these services even make it possible for you to connect with an accountant who can answer any questions and keep things up-to-date throughout the year. Having that expert advice can help you make your business a success.
Ultimately, it’s up to you whether you feel comfortable doing your own taxes or not. But if you do decide to handle it yourself, make sure you know what you are doing.
Disclosure – this is a collaborative post.
