Home Small Business Dealing with Tax Issues – The Importance of Hiring a Professional

Dealing with Tax Issues – The Importance of Hiring a Professional

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Working for yourself is beneficial in many ways, but as any business owner knows there are a few major drawbacks of being self-employed. By far one of the most confusing and problematic parts of being your own boss is having to deal with tax.

The government don’t make it easy to understand the ever-changing rules and regulations regarding tax, making it easy to run into various issues along the way. Below you’ll discover the most common tax issues and why a professional accountant can be extremely valuable.

IR35 Legislation Issues

Are you familiar with IR35 legislation? Otherwise known as Intermediaries Legislation, IR35 is a tax and National Insurance contribution legislation that applies to those who work via an intermediary. It’s actually a very complex legislation, though there is an in-depth guide available on the Gov.uk website.

It was introduced in 1999, though was put in force in 2000 and it largely affects contractors and businesses who don’t fall under the self-employment definition provided by the HMRC.

The main thing to know is that if you are liable for IR35, your tax and National Insurance contributions will increase. If the legislation is ignored, it can have serious consequences on your business.

You could find yourself facing significant penalties and fines if it’s found that you’ve ignored IR35 legislation; with harsher penalties given to those who knowingly ignored the rules.

Due to how complex IR35 legislation is, it is highly advisable to hire a professional accountant. They are fully versed in the legislation and know exactly what you need to do in order to comply. They’ll be able to help you avoid any potential fines and penalties and ensure your business isn’t at risk.

Common Tax Filing issues

You’d think filing a tax return would be the easiest part of the tax process. However, it’s surprising just how many businesses incorrectly fill out their returns. It may seem like a pretty small problem, but tax return issues can incur serious costs for your business. From failing to accurately record expenses to providing incorrect Payroll information – there’s a lot of things you can do wrong.

Overall failure to stay up to date with tax rules and regulations can have a devastating effect on your business. For the average business owner, it’s impossible to be on top of the latest regulations. That’s why having a professional, knowledgeable and experienced accountant is a necessity.

They can help not only ensure you are following the legislation, but they can also potentially save you a lot of money too.

So the question isn’t “can you afford an accountant?”, it’s “Can you afford NOT to have one?”.

9 COMMENTS

  1. I love the way you ended your article! 😀
    I can’t even think about not hiring a professional when it comes to taxes. It’s ‘bad’ enough a business owner has to deal with clients, work, stress and whatnot, I can’t even imagine myself doing the taxes as well! I haven’t even heard about IR35 legislation, god only knows what other tax laws are out there! It’s too risky not to hire an accountant.

  2. My dad used to own a business (he sold it a while ago, used the money to retire) and he did everything himself, including the taxes. He was always well informed about tax issues and tax laws and such, I guess he had a knack for all this stuff. Unfortunately, I did not inherit his wisdom 😀 Or, maybe it’s less embarrassing to just say that back then, there were simpler times!

  3. Before, when I was someone else’s employee, I dealt with taxes myself. Each year I’d make an appointment when tax season came and just follow the usual procedure. Now that I work for myself, things are different. I’m afraid to make even the smallest mistake, because of the possible financial consequences. So yes, I do agree hiring an accountant was one of the smartest moves I ever made for my business.

    • It is a much different story when you have to take those extra steps, and when things are not just more or less laid out for you in terms of what you need to know. I do not have much experience with this personally, but I have a good friend who owns his own business and it is very interesting to see how much attention he has to pay to little things when it comes to reporting it on his taxes. It is a whole different ballgame, and where a TurboTax or similar service is really not all that much help.

  4. When it comes to tax issues, I’m torn between doing the taxes yourself and hiring a professional. In the company I used to work for before, we relied heavily on professionals. We readily agreed to whatever was advised to us. Then came a time when we were forced to do the taxes ourselves and learned that some of the information that were fed us were entirely wrong. Thus, when it comes to tax issue my stand is to still get a professional to help you out, BUT YOU NEED TO KNOW ABOUT TAXES YOURSELF. You have to be informed of taxation rules, that way you won’t be easily fooled and can actually make your professional accountant accountable if s/he messes up. Hefty FINES are really not something we would want to face because of tax violations.

  5. Very informative this article regarding tax issues. I found this article really helpful and whatever has been shared in here those all are very much important to know for an individual, companies or any organisation. Finally it’s very much clear to all that how much important to hire a professional for tax dealing. Thanks

  6. It’s important for any business to have a tax professional at least on a retainer basis. Complicated taxation system make it almost impossible for small businesses to keep up. Having a professional on board will allow business owners to focus on operating and growing their business. That is not to say, however, that they should be lax about tax filings and rely absolutely on their accountant. Entrepreneurs should at least learn the basics of taxation because ultimately, they are liable for their tax returns.

  7. Well I consider myself lucky to still be in that range where my taxes are pretty simple. That said, that is surely not going to last forever and I am not really looking forward to dealing with all the complexities. Given that I can definitely see the pros of going with a professional, and for me it would just come down to finding someone who does not charge that much. I can only use TurboTax for so long.

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