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If you’re self-employed or the owner of a small business, it is usually much more worthwhile outsourcing your tax return to an accountant than doing it yourself.
Even if you can do it quickly and efficiently, having an accountant fill out your tax return reduces your chances of making expensive mistakes one way or another – either incurring large fines for underpaying or overpaying where you don’t need to.
If you balk at the prices you’re initially quoted, don’t worry! That’s why I’m here. With these five easy-to-follow steps, you can get a cheaper quote for your tax return, making the whole procedure that much smoother and easier.
1. Organise Your Accounts
“Wait! Surely that’s my accountant’s job?”
Not really.
Or, more accurately, yes that is one skill an accountant should have, but it’s additional work on top of filing your tax return correctly. Organizing your accounts is one thing, and it’s something you can do yourself with complete accuracy.
Interpreting your accounts, and knowing what to do with them and say about them is a completely different thing.
If you organize your accounts, you can knock a sizeable chunk off the accountant’s fee!
2. Be Prepared To Travel
Accountants in the city can often be cheaper than accountants in the country and suburban areas, especially in wealthier areas of the country and suburbs.
This seems counter-intuitive but is actually perfectly logical. There are more accountants in large financial centers, therefore there is more competition for work. Where there is more competition, prices plummet.
For a different example, the sorts of accountants London businessmen will call upon are going to be completely different from accountants in more northern cities such as Birmingham. They will have different areas of expertise, and much more expensive fees – you might end up paying more for less!
If you can travel further abroad to check for accountants there, do so. You will usually find a cheaper quote.
3. Check For Low-Income Help
If you are on low income, you are likely eligible for programs to help with your tax return.
In the United Kingdom, for instance, you can visit free workshops designed to help freelancers with simple tax returns, while in the United States of America you could get your entire tax return completed for free under the VITA program.
Note that definitions of low income vary from place to place. In America, for instance, the IRS will give VITA places to people on incomes of under $50,000 p.a., which would be a huge amount in some parts of the world.
4. Do Your Taxes Early
As deadlines approach, accountants can take more and more liberties with the prices they charge. A desperate customer will pay more-or-less anything.
Hire an accountant to do your tax return sooner rather than later, and it should be much cheaper.
5. Move Online
The key difference between looking for an accountant offline and looking for an accountant online is that online, the accountant is also looking for you.
This means that you are in a much stronger bargaining position. If a quote isn’t quite low enough a thousand other accountants are clamoring to do the same job for a price that fits your budget.
If you do hire an accountant, I recommend that you do use an online service in some way or another.
How Much Is ‘Cheap’?
Really, ‘cheap’ depends on your circumstances.
For someone doing a small but complicated range of self-employed and freelance work, cheap might be £100-£150, because they can’t afford to make a mistake, but they equally can’t afford to employ the best.
For someone who earns all their income from one source, by contrast, it might be unthinkable to pay more than £30 for a tax return.
On the other end of the spectrum, someone running a moderately successful small business with disorganized records might expect to pay a great deal more.
It’s all based on where you are and deciding what’s right for you. Whatever you do, take your time, prepare, and don’t rush into anything!
James Duval writes about personal finance for Choose Your Accountant, who offers an online portal for accountants in London to accountants in Birmingham.
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