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?”.