Why Should You Pay An Accountant If You Are Self-Employed?
No-one enjoys paying taxes. It’s bad enough for people in full-time work, seeing that hefty chunk of change taken from their pay before it even reaches them.
For the self-employed it’s even worse. Working out your taxes can feel like a second job, especially if you’re learning about it for the first time. One person I know has two part-time jobs and four clients they do freelance writing for.
The average person simply does not have the time to sort a mess like this out, and if you factor in calls to HMRC you could end up losing more money than you would have paid to an accountant, plus you are left with the worry of hefty fines for any honest mistakes you’ve made filling out the forms.
In the case of my friend with the complex employment situation, who we’ll call “Jonty” to protect their true identity, there were three main reasons it made a lot more sense to go with a tax accountant than to struggle through on their own.
The stress of being fully responsible for their own taxes can really get to freelancers. Jonty was no exception.
Freelancers deal with enough stress sourcing clients, maintaining good relationships with existing clients, getting the work done as fast as possible, invoicing and chasing up on bills… every job that would be carried out by someone else in a company, has to be done by the freelancer themselves.
Jonty said that they’d have gone mad if they’d had to learn how to do another task, simply because all their mental energy was focussed on keeping themselves fed and clothed.
2. Lack of Resources
There are actually thousands of resources out there full of generic tax advice.
The problem is, every self-employed person is in a completely unique situation. No single piece of advice will tell them what to do in their specific situation – it’s not in anyone’s interests to make such specific recommendations.
To be completely certain that you’re on the right track, you need to know enough about taxes that you might as well become an accountant yourself – Jonty said that no matter how much information they found, there would always be something unique to their situation that wasn’t explained.
3. Losing Clients
Jonty told me that there were a few clients that they had wanted to sign, but they felt that they couldn’t because it would simply cause too many problems with their tax return.
Find me a freelancer who can afford to lose a client, and I’ll find you a comic book fan who thinks that Batman is ‘meh’.
By having an accountant take care of taxes, you can ensure that you are able to take advantage of good opportunities without making more work for yourself – even if they don’t make you much short-term, you can capitalise on the relationships created long-term.
Making the Choice
The decision to choose an accountant is relatively easy. The hard part is knowing how to choose your accountant.
In general, it’s best to strike a balance between absurdly cheap accountants, who can sometimes be ‘cowboys’, and accountants who tend to cater for more upmarket clients – who will charge you much, much more.
Jonty went with an accountant that cost £150 – nearly as much as their taxes for the five months that they’d spent doing freelance work. For them, though, it was worth it.
How much would you be prepared to pay for an accountant, if you could be sure that your taxes would be filed correctly and on time? Let us know in the comments!
James Duval is an IT Manager and business expert who writes blog posts for Choose Your Accountant, a free online accountancy search site.