need an acountant? Thread poster: oliver098
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oliver098
Local time: 14:56
English to French
I plan to seek translating work as a sole trader. How necessary is it to have an accountant? I have spoken to a couple and the one I am considering said I should keep records of incoming and outgoing money and show them to them (free) after a couple of months to check I was doing it right. They said I could ring for free advice during the year and they would charge about £400 to do my tax returns for me at the appropriate time. Is that reasonable, or could I just fill out the forms myself? Bear... See more I plan to seek translating work as a sole trader. How necessary is it to have an accountant? I have spoken to a couple and the one I am considering said I should keep records of incoming and outgoing money and show them to them (free) after a couple of months to check I was doing it right. They said I could ring for free advice during the year and they would charge about £400 to do my tax returns for me at the appropriate time. Is that reasonable, or could I just fill out the forms myself? Bearing in mind I'm not knowledgable about finance and tax generally.. Or is it too much to pay, also bearing in mind it is very hard to say how much I might make. ▲ Collapse
| | | | | my experience | Nov 2, 2006 |
is that you could do everything on your own, devoting some time to it, of course (time you could have used to make new customers, translate or have a rest), and getting a couple of headaches with forms and stuff if you are like me and do not really like all this paperwork...
I must say that I do think that professionals should be paid to do their work in all fields, and not being an accountant myself, I hire the services of a reasonably-priced one (I think) that has been able to pr... See more is that you could do everything on your own, devoting some time to it, of course (time you could have used to make new customers, translate or have a rest), and getting a couple of headaches with forms and stuff if you are like me and do not really like all this paperwork...
I must say that I do think that professionals should be paid to do their work in all fields, and not being an accountant myself, I hire the services of a reasonably-priced one (I think) that has been able to provide very useful assessment in all these years (approx. 8).
That said, I live in Spain, so I don't know the way things are in your country. Here, I pay around 60 EUR/month and she does everything that needs to be done and I can forget about all those things and concentrate on my work.
Best of luck!
Rosa ▲ Collapse
| | | | Sonja Allen 
United Kingdom
Local time: 14:56
English to German
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| I would consider an accountant but shop around first | Nov 2, 2006 |
I did my tax return myself this year as I thought it couldn't be that difficult with my couple of invoices and outgoings I had in the first year. But in the end I spent 3 days on it and had to phone the Inland Revenue Helpline several times. There was just so much to consider. For example my Broadband costs I wasn't allowed to claim 100% as no one at IR would believe you that you only use it for work purposes. So I had to adjust the costs. Heating and Lightning I could claim according to the num... See more I did my tax return myself this year as I thought it couldn't be that difficult with my couple of invoices and outgoings I had in the first year. But in the end I spent 3 days on it and had to phone the Inland Revenue Helpline several times. There was just so much to consider. For example my Broadband costs I wasn't allowed to claim 100% as no one at IR would believe you that you only use it for work purposes. So I had to adjust the costs. Heating and Lightning I could claim according to the number of rooms in the house, for the computer I could only claim 40% as a first year allowance etc. Although it wasn't impossible to do, it was just nerve-racking and time-consuming and when I handed the return in, I wasn't really sure, if I made most of it all and if I will not be paying too much tax in the end. So I resolved to take an accountant next year. He or she might also be able to claim more and so the cost of the accountant might be set off.
I have no idea what it costs and if £400 is much. A translator friend told me, she paid about £200. But it probably also depends how neatly you hand your documents and receipts over to the accountant. If everything is in good order and the accountant can see everything easily from your documents, he will not have to spend so much time which will reflect in the charges. But try and shop around. Ask other accountants what they charge. ▲ Collapse
| | | | Latin_Hellas (X)
United States
Local time: 15:56
Italian to English
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| Yes, £400 Seems Much, Shop Around | Nov 2, 2006 |
Unless you make less than the minium required for filing - in other words, if you are truly a professional translator - it is probably a good idea to have a professional tax accountant.
As a previous poster mentioned, they may seem simple, but tax laws are actually quite complex. In the end, however, in countries like the UK and the US, the actual tax burden is not as heavy as in continental Europe. You can try it yourself, but, as mentioned, you'll wind up with a headache ... See more Unless you make less than the minium required for filing - in other words, if you are truly a professional translator - it is probably a good idea to have a professional tax accountant.
As a previous poster mentioned, they may seem simple, but tax laws are actually quite complex. In the end, however, in countries like the UK and the US, the actual tax burden is not as heavy as in continental Europe. You can try it yourself, but, as mentioned, you'll wind up with a headache (seriously) and will worry for days, maybe months, that you made a mistake. It is worthwhile to pay for the services of a professional, at least for a few years or until tax laws change.
In any case, though the cost of living in much of the UK is higher, generally speaking, than in continental Europe or the US, £400 per year for a relatively (italics) simple translator's income tax return seems a bit much, so, as already suggested, shop around.
Finally, though you avail yourself of the help of a professional to prepare your income tax returns, make the effort to be aware of the tax laws as they pertain to your situation. First, you are still liable for the accuracy of the return. Second, you may actually find that you need to give your professional preparer a little advice or hint from time to time: they make mistakes too and they cannot be experts on every aspect of the tax code that pertains to every situation, especially that of a low/middle income sole proprietor.
So caveat emptor and CYA.
Hope this helps.
[Edited at 2006-11-02 12:24]
[Edited at 2006-11-02 12:26] ▲ Collapse
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| Possibly not in the first year? | Nov 2, 2006 |
1. There are plenty of books available (public library) on the subject of self assessment. The ones published by various newspapers (Daily Mail, Telegraph, etc.) are all fairly clear and explain things with examples, and are updated each year to take new rules into account.
2. If your self-employed turnover is less than 15k GBP, you don't have to provide any details whatsoever, just income (one figure), deductions (one figure), then your taxable income. As we are already in November... See more 1. There are plenty of books available (public library) on the subject of self assessment. The ones published by various newspapers (Daily Mail, Telegraph, etc.) are all fairly clear and explain things with examples, and are updated each year to take new rules into account.
2. If your self-employed turnover is less than 15k GBP, you don't have to provide any details whatsoever, just income (one figure), deductions (one figure), then your taxable income. As we are already in November and you're only just starting out, this could easily apply to you...
3. Translation is not complicated, financially. It's mostly income (!), very few outgoings. The 2 relatively complicated areas are a) if you work from home, what proportion you can claim as business expense for rent/mortgage, utilities, council tax, etc and b) capital expenditure, which for a translator is only likely to be a computer. The books explain all this quite clearly.
4. With current tax rates, and notwithstanding the fact that accountants' fees are of course tax deductible, to make it worthwhile paying an accountant, that accountant needs to find 4 times the amount you are paying them, in deductions that you would not otherwise claim in order to be cost-effective. In other words, if you pay an acc. 200 quid, they need to find extra deductions (that you didn't know about) of 800 quid to be cost effective. Given, as I said, that translation is relatively straightforward in business terms, I find this unlikely
5. Assuming you keep decent records throughout the year, which of course you should, I find it takes at most half a day to fill out the form. Although I admit I've built a spreadsheet which replicates the self assessment form, which makes life easier, and this spreadsheet fills itself in every time I update my records of income (invoices paid) and outgoings (utilities, council tax, stationery, whatever).
All that said, I do keep things very simple. I don't outsource work, and my personal tax situation is generally pretty straightforward. I don't claim every single stamp and phone call as a business expense. This may not apply to you. ▲ Collapse
| | | | Sonia Hill
United Kingdom
Local time: 14:56
Italian to English
| My experience | Nov 2, 2006 |
I have an accountant in the UK as I just don't like doing all the paperwork and would rather it were all done properly. If I did it myself I would worry about getting things wrong.
I have just had a bill for £325, which is about normal I think. £400 is probably a bit on the expensive side, so it might be worth your while getting a few more quotes.
| | | | | Not in the UK | Nov 2, 2006 |
When I was tax resident in the UK I have always done it myself - like the others have said. Get a few good books, use the helpline. It's really not that complicated. Now when I was in Germany on the other hand I would never have dared to attempt it myself - the German tax system is so complicated that an accountant was 100% essential.
And I would also like to debunk the German high tax theory. although the headline rate in Germany may be higher than in the UK being there was highly ... See more When I was tax resident in the UK I have always done it myself - like the others have said. Get a few good books, use the helpline. It's really not that complicated. Now when I was in Germany on the other hand I would never have dared to attempt it myself - the German tax system is so complicated that an accountant was 100% essential.
And I would also like to debunk the German high tax theory. although the headline rate in Germany may be higher than in the UK being there was highly tax efficient for me. Last year I only paid around 10% tax and I am convinced that in the UK I will end up as a higher rate tax payer. For one thing I was able to take advantage of my husband's tax coding - and as he earned virtually 0 that meant double tax allowance. Now I am back in the UK I am not only finding the cost of living in London crazy compared with Stuttgart but am also concerned about the tax bill that I will face.
So take courage, organise your finances well and got for it!
Gillian ▲ Collapse
| | | | Samuel Murray
Netherlands
Local time: 15:56
Member (2006)
English to Afrikaans
+ ...
| Getting financial advice can't hurt | Nov 2, 2006 |
oliver098 wrote:
I plan to seek translating work as a sole trader. How necessary is it to have an accountant?
Getting financial advice from a financial consultant before embarking on your sole tradership is a good idea. He can tell you what sorts of records you should keep to make it easy for the tax consultant to do your books at the end of the financial year and get you the biggest tax discount/rebate possible. A good tax consultant can get you a good rebate even if your filing system is a cardboard box, but your cut may be less if he charges per hour.
EUR 400 seems like a lot of money. If you have everything ready, the tax consultation shouldn't take more than an hour (the first year's consultation might take a little longer, but after that the consultant may simply use your previous year's return as a guideline to fill in this year's).
...or could I just fill out the forms myself?
I'm sure you could, but its better to let someone do it who is skilled at doing it. Your rebate will certainly be more, and the chances of you getting a request for audit from the tax man because he didn't like something on your return, is also much less.
In ZA it is illegal for tax consultants to be paid a percentage of the rebate -- they have to charge per hour.
[Edited at 2006-11-02 15:15]
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Samuel Murray
Netherlands
Local time: 15:56
Member (2006)
English to Afrikaans
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| Can't you pay tax every month? | Nov 2, 2006 |
Gillian Noameshie wrote:
...but am also concerned about the tax bill that I will face.
Do you have to pay tax only once a year, or can you pay advance payments once a month (or at any other time) to ensure that you don't get a nasty surprise (but a pleasant one) at the end of the financial year?
If your country's tax department don't pay a competitive interest rate on a positive balance, how about putting each month's approximate tax money into a savings account where it can draw interest until the end of the financial year?
| | | | | monthly? not initially | Nov 2, 2006 |
Hi Samuel,
Not inititally. I am now in tax limbo because:
1) Revenue and Customs didn't process my form stating that I left the country so treated me in my absence as if I was in default. I built up a tax bill of over 18,000 pounds while paying German tax and only found out when I as a good citizen notified them I was back in the country! They admitted it is all a mistake and they will be correcting it but haven't done so yet. They issued a court judgement against me which they are n... See more Hi Samuel,
Not inititally. I am now in tax limbo because:
1) Revenue and Customs didn't process my form stating that I left the country so treated me in my absence as if I was in default. I built up a tax bill of over 18,000 pounds while paying German tax and only found out when I as a good citizen notified them I was back in the country! They admitted it is all a mistake and they will be correcting it but haven't done so yet. They issued a court judgement against me which they are now lifting!!!!
2) In the UK you register and can't pay in advance until you have submitted your first tax return (next April at the earliest). At that point they tell you how much tax you owe for the tax year that just ended and how much to pay on account for the current year. ▲ Collapse
| | | | Tim Drayton
Cyprus
Local time: 16:56
Turkish to English
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| I don't think an accountant is necessary. | Nov 2, 2006 |
I was a sole trader in the UK in the period 2000-2002 and just completed my own self-assessment forms every year. I don't recall finding it very difficult and the people at the tax office were helpful if you called with a query. One thing I found useful was as I collected receipts and invoices for tax-deductible expenses over the year, I classified each one according to the categories of expenses shown on the form and kept a running total of each such category so that when the time came to fill ... See more I was a sole trader in the UK in the period 2000-2002 and just completed my own self-assessment forms every year. I don't recall finding it very difficult and the people at the tax office were helpful if you called with a query. One thing I found useful was as I collected receipts and invoices for tax-deductible expenses over the year, I classified each one according to the categories of expenses shown on the form and kept a running total of each such category so that when the time came to fill in the form I had the figures ready.
I am now a sole trader in Cyprus and do my own accounts here, also. The tax form in Cyprus is a breeze - just a single folded A3 sheet making four pages and in practice you don't have to do much more than enter your turnover, deduct expenses and calculate taxable income!
However, I appreciate that there are countries where taxation is very complicated and you really need an accountant. I have never heard of anyone doing business in Turkey and not having an accountant, for example. ▲ Collapse
| | | | | £400 is way too much | Nov 2, 2006 |
I had to contact an accountant earlier this year as I needed a confirmation of my earnings for a mortgage application. We also spoke about the possibility of him doing my tax returns and he suggested a price of £60. He offered me such a good price because he knew that, with our line of business, there's not that much work to do on the tax return and also because I showed him that I'm keeping my books so in the end it would just have been a job of adding the numbers up and writing them into the ... See more I had to contact an accountant earlier this year as I needed a confirmation of my earnings for a mortgage application. We also spoke about the possibility of him doing my tax returns and he suggested a price of £60. He offered me such a good price because he knew that, with our line of business, there's not that much work to do on the tax return and also because I showed him that I'm keeping my books so in the end it would just have been a job of adding the numbers up and writing them into the return form, maybe suggest one or two tricks how to claim more money back from the Inland Revenue.
The trick is, not to go to one of the big accountant services companies but to go to someone who is self-employed and a one-man business or at most working together with two or three other accountants. Of course, it is necessary to check that the accountant has the proper qualifications but as this is such a regulated market, it is hardly possible for any "cowboy" accountants to survive. A self-employed accountant maybe will not be a member of every single accountancy association but that is not necessary anyway.
In the end, I filled the tax return form in myself and would recommend that to everyone who has a turnover of less than, let's say, £100K. The tax return form is quite scary at first but is not too complicated and the different forms online or the help from the Revenue callcenter is quite helpful. ▲ Collapse
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Tanja Hieber
United Kingdom
Local time: 14:56
Member (2003)
English to German
| Help from HMRC | Nov 2, 2006 |
If you decide to do it yourself, the HMRC Business Support Teams (http://www.hmrc.gov.uk/bst/index.htm) offer workshops on tax issues, e.g.:
Self-Assessment (SA) for the Self-Employed
Aimed at sole traders and partnerships we can explain how to complete your SA return. We will cover expenses and allowances, the important dates, and how to pay your tax.
| | | | oliver098
Local time: 14:56
English to French
TOPIC STARTER | that's helpful | Nov 2, 2006 |
Thanks for the tips. Gives me more to go on. I will shop around a bit anyway, or consider just doing it myself.
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