If you’re self employed like me, chances are you hate doing your taxes. Whether you’re in the UK and are filing your tax returns online, or you’re elsewhere and regretting not sorting receipts sooner… There’s got to be an easier way. Today, I am discussing ways to make filing your UK tax returns easier. I’ll also be asking when do you need to consider an accountant? Read on to find out my thoughts.
*This is a partnered post*
When Do You Need To Consider Hiring An Accountant?
I’ve been self employed for several years now. Submitting my online tax return is definitely not my favourite thing to do, but I’ve got a few hacks to make it easier, and avoid the need for an accountant… For now anyway!
Last year, I shared these free income and expenses templates for bloggers. They make it a quick and easy job to update your income, expenses and net profit as you go along. Firstly, I spend around 40 seconds adding a line of information to my “income” spreadsheet every time I submit an invoice. Then I spend around 15 seconds adding the payment information when the invoice is paid.
Additionally, I add any purchases and expenses to my “expenses” spreadsheet as and when I make purchases or pay invoices. Then on the 1st of each month, I spend 30 seconds adding my monthly income and expenses for the previous month to a “net earnings” spreadsheet to work out my net income for the month. Honestly, these spreadsheets have made filing my tax returns a 30 minute job!
Considering An Accountant
At this point, I don’t think I need to seriously consider hiring an accountant. If you’re in America and are in a position to consider hiring one… It’s worth considering a Sales Tax Consultant instead. Personally, I don’t really understand sales tax compliance. So I’d probably be floundering if I were trying to submit my taxes on the other side of the pond.
How Does Sales Tax Work?
In the UK, we have VAT (value added tax) which is added onto the price of certain things. This is set at a rate of 20% and is included on the ticket price. So what you see is what you pay. In the USA Sales Tax varies from state to state, and also from City to City, within the same state. It ranges from 0% in Montana to 13.5% in Alabama.
When you go into a store, the price on the shelf does not include Sales Tax. So the same item’s price will vary from one City to another – even in the same state. If you went into a Target in Alabama and picked up a $20 item… You’d pay $2.70 more for it than you would in Montana. This tax is collected by the retailer and they then have to make sure their tax bill is paid.
So when considering when do you need to consider an accountant, it’s a no brainer for any retailer in the USA to hire one or use a similar service. This is to ensure their sales tax compliance is 100% correct.