Brokers have emphasised the importance of getting a tax return completed as early as possible, and argued that quality accountants are worth the expense.
With the end of the 2022-23 tax year last week, self-employed workers across the UK can now start to think about completing their tax return.
And brokers told Mortgage Solutions that it is important for self-employed advisers to do this as soon as possible, with one completing their return as soon as the new tax year had begun.
Getting off to a positive start
Samuel Gee, director at Manning Gee Investments, explained that he used to be complacent about his tax return, leaving it until the last minute and feeling stressed about the process.
“But this year I decided to take a different approach and tackled it before 7am on the first day of the new tax year. By being proactive and getting the task done early, I was able to avoid the stress and worry that often come with tax season,” he continued.
Gee added that he has always done his return himself “as it’s fairly simple”, though he has help on hand from those with greater tax insights if needed.
Jamie Alexander, mortgage director of Alexander Southwell Mortgage Services, said he has always submitted his tax return as soon as possible, admitting he has “never understood the mentality of submitting them the following January”.
He added: “I would prefer to know my exact bill as early as possible to prepare for it. I use an accountant who points me in the right direction and provides me with the estimated bill from May.”
Scott Taylor-Barr, financial adviser at Carl Summers Financial Services, explained that his business is run through a limited company, so his personal tax returns are not completed until the year-end of the limited company.
He added: “I do push my accountant to get them done as soon after that as possible; when I was a sole trader I would always get my tax return done as soon as I could after the end of the tax year too, so I can get as much prior notice as to the amount I need to pay by 31st January the following year. No one likes a surprise tax bill bigger than they expected, or have saved for.”
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Leaving it late
But not all brokers are so determined to get their returns sorted swiftly.
Jane King, mortgage adviser at Ash-Ridge Private Finance, admitted she was terrible with her tax return, constantly putting it off to the point that it is often submitted on the 30th January.
However, she noted that as her accounts “are very simple and straightforward” it only takes half a day to put them together.
The benefits of an accountant
Anil Mistry, director of RNR Mortgage Solutions, said that as a limited company, he needs to obtain two sets of accounts: one for the business, and another for personal use.
As a result his accountant has historically deferred completing them both until the final month of the year.
He continued: “In my role as a broker, I find it helpful to have a comprehensive breakdown of my company’s expenditures, categorised by area. This allows me to identify areas where costs can be reduced or budgeted for in the future. I have even asked my accountant to establish new criteria on Dext, such as marketing, advertising, and coaching, to streamline this process, and know what is being spent where.”
Andy Wilson, founder of Andy Wilson Financial Services, said that his return is prepared by the firm’s accountants as part of a bundle of services provided.
He explained: “The returns are submitted on our behalf, after checking and our approval, at the same time as the business accounts are prepared and signed off. This will usually be around July each year. This is because our network requires the finalised accounts as soon as possible. I never allow this to be last minute as it would stress me out.”
Wilson also emphasised that while accountants are not cheap, they do provide brokers with peace of mind. “In 12 years, I have never had a single query from HMRC as a result of their diligence,” he added
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Accountants save more money than they cost
James Miles, director of The Mortgage Quarter, said that as a broker he can see first hand how important it is to get your accounts in order ASAP and be ahead of the curve so that you can submit your tax return.
He continued: “Despite being surrounded with numbers constantly I’d be naive to think I’m the best person to be submitting my own returns. With tax laws changing every year and allowances bouncing around as much as the stock market, use a professional accountant. It’s a must and I have no doubt they’d save you more money than their cost.”
And Taylor-Barr highlighted the value provided by quality accountants, noting that not only can they ensure that the return is done correctly, they can also highlight potential savings or allowances you were not aware of.
By John Fitzsimons
Source: Mortgage Solutions