Should You Use an Accountant for Self Assessment Tax Return

Self Assessment has a way of turning a simple task into a pile of paperwork fast. A few income sources, some expenses, and a couple of tax rules that are easy to miss can make it hard to feel confident that everything is correct.

For some people, filing alone is straightforward and cost-effective. For others, an accountant can prevent mistakes, spot claims that get overlooked, and reduce the stress that comes with deadlines.

This guide helps weigh up whether using an accountant for Self Assessment makes sense, based on income type, complexity, and how much time and risk feels reasonable.

Understanding Self Assessment Tax Returns

Before diving into whether you need professional help, let's clarify what self-assessment actually involves. At its core, it's HMRC's way of collecting Income Tax from people whose finances are a bit more complicated than the standard PAYE system can handle. You're essentially telling the government about your income and claiming any allowances or reliefs you're entitled to.

Who Needs To Complete A Self Assessment

You'll need to complete a Self Assessment if you tick any of these boxes: you're self-employed or a sole trader earning more than £1,000 per year, a partner in a business partnership, or if you had untaxed income exceeding £2,500. Directors of limited companies also join this club, along with anyone earning over £150,000 annually.

But it doesn't stop there. Landlords with rental income, people with significant investment income, and those claiming Child Benefit while earning over £50,000 all need to file. Even if you've received income from abroad or made significant capital gains from selling assets like property or shares, you're in Self Assessment territory.

The list might seem overwhelming, but here's the thing: just because you need to file doesn't automatically mean you need an accountant. Your specific circumstances determine whether professional help is worth the investment.

Key Deadlines And Penalties

Missing HMRC deadlines can trigger automatic penalties and interest, even if the tax bill is small. Here are the key dates and what happens if you miss them.

• 5 October: Register for Self Assessment by this date if you need to file for the previous tax year.

• 31 October: Deadline for paper Self Assessment returns to reach HMRC.

• 31 January: Deadline for online Self Assessment returns and for paying any tax owed for that tax year.

• 31 January and 31 July: Payments on account for the next tax year are usually due on these dates.

• Late filing penalty starts immediately: Miss the 31 January filing deadline, and you get an automatic £100 penalty, even if you owe no tax.

• Daily penalties after three months: After three months late, HMRC can charge £10 per day, up to a maximum of £900.

• Extra penalties at six and twelve months: At six months late, there is an additional penalty of £300 or 5% of the tax due, whichever is higher. At twelve months late, another penalty can apply.

• Interest on late payment: Interest is charged on late paid tax from the due date. The rate changes over time, and can make the total cost climb quickly if delays drag on.

Benefits Of Using An Accountant

Maximising Tax Relief And Allowances

A skilled accountant brings something invaluable to the table; they know the tax code inside out and, more importantly, they know which reliefs and allowances apply to your specific situation. While you might claim the obvious expenses, accountants spot opportunities you'd never think of.

Take working from home, for instance. You might claim a flat rate of £26 per month, but an accountant could calculate actual costs based on your home's square footage, potentially saving you hundreds more. They'll identify professional subscriptions you forgot about, mileage you didn't track properly, and capital allowances on equipment you didn't realise qualified.

Business owners particularly benefit here. Accountants understand the nuances between what's allowable for sole traders versus limited company directors. They'll structure your affairs efficiently, perhaps suggesting salary and dividend splits that could save thousands in tax and National Insurance.

Avoiding Costly Mistakes And Penalties

Tax returns aren't just about filling in boxes; they're about understanding what each box means and how different sections interact. One misplaced figure or misunderstood question can trigger an investigation or result in overpaying tax.

Accountants act as your safety net. They'll spot inconsistencies that might raise red flags with HMRC, guarantee your figures align with previous years' submissions, and double-check calculations that software might miss. They understand the difference between tax avoidance (legal) and tax evasion (very much not), keeping you on the right side of the law.

Perhaps most crucially, if HMRC does come knocking with questions, your accountant handles the correspondence. They speak HMRC's language, understand their processes, and can resolve queries before they escalate into full investigations.

Professional Expertise And Time Savings

Let's talk about the elephant in the room time. How many hours have you spent poring over HMRC guidance, watching YouTube tutorials, and second-guessing every entry? For many, it's days of stress and confusion that could be spent on actually earning money.

Accountants complete returns in a fraction of the time it takes you. What might take you a weekend of hair-pulling frustration takes them a couple of focused hours. They've got systems, software, and experience that streamline the entire process.

Beyond just filing your return, they provide year-round support. Got a question about whether something's deductible? They're a phone call away. Considering a major purchase or investment? They'll explain the tax implications before you commit. This ongoing relationship often proves more valuable than the actual tax return preparation.

Drawbacks Of Hiring An Accountant

Cost Considerations

Let's address the obvious concern that accountants aren't free. Basic Self Assessment services typically start around £150-£300 for straightforward returns, but prices climb quickly with complexity. Freelancers with multiple income streams might pay £400-£600, whilst landlords with several properties or company directors could see bills exceeding £1,000.

These costs hit particularly hard if you're just starting out in self-employment or your side hustle isn't yet profitable. Spending £300 on an accountant when you've only earned £2,000 feels disproportionate, especially if your tax affairs are relatively simple.

You also need to factor in ongoing costs. Most accountants charge annually, and their fees often increase each year. Some add charges for additional services like answering queries or handling HMRC correspondence, turning what seemed like a fixed cost into a variable expense.

Loss Of Personal Control

Handing your finances to someone else means giving up a degree of control. You're trusting them with sensitive information and relying on their competence and honesty. Not all accountants are created equal; some might miss deadlines, make errors, or simply not give your return the attention it deserves.

There's also the knowledge gap to take into account. When someone else handles your taxes, you might never fully understand your financial position. You become dependent on their explanations and interpretations, potentially missing opportunities to optimise your affairs yourself.

Some people find this lack of involvement frustrating. They want to understand where their money goes, why they owe what they owe, and how different financial decisions impact their tax position. Using an accountant can create a disconnect between you and your finances that leaves you feeling out of the loop.

When You Should Consider Professional Help

Complex Income Sources

Multiple income streams are where things get properly complicated. If you're juggling employment, self-employment, rental income, and investments, your tax return becomes a complex puzzle where pieces from different sections need to fit together perfectly.

Consider someone who works part-time, runs an Etsy shop, rents out a spare room on Airbnb, and has dividend income from shares. Each income type has different rules, allowances, and reporting requirements. The £1,000 trading allowance might apply to the Etsy income, and rent-a-room relief could cover the Airbnb earnings, but understanding how these interact with your employment income requires expertise.

Cryptocurrency adds another layer of complexity. With HMRC increasingly focused on crypto gains, properly reporting these transactions is essential. You need to track every trade, calculate gains in pounds sterling, and understand whether you're trading or investing. One mistake here could trigger an investigation.

Business Ownership And Self Employment

Running a business, whether as a sole trader or limited company director, almost always justifies professional help. The tax implications go far beyond simple income reporting; you're dealing with allowable expenses, capital allowances, basis periods, and potentially VAT.

Sole traders need to understand which expenses are wholly and exclusively for business use, how to handle mixed-use assets, and when to claim capital allowances versus repairs. Directors face even more complexity, balancing salary and dividends, understanding benefit-in-kind rules, and exploring IR35 if contracting.

Growth adds complications,s too. As your business expands, you might hit VAT thresholds, need to register for PAYE, or consider incorporation. These transitions have significant tax implications that require professional guidance. An accountant helps you plan these moves strategically, potentially saving thousands in unnecessary taxes.

When You Can Handle It Yourself

Simple Employment Income

If your financial life consists of one job with all tax handled through PAYE, minimal savings interest, and no significant additional income, Self Assessment might be surprisingly straightforward. You're essentially confirming information HMRC already has, with little room for optimisation or error.

Even with multiple employments, if they're all taxed at source and you're not claiming complex reliefs, the online system guides you through relatively painlessly. HMRC has improved their interface significantly; it now catches common errors, calculates automatically, and even pre-populates some information.

The key indicator? If you can answer every question on the form without googling or second-guessing, you're probably fine going solo. Your P60s and P11Ds contain mostof the information you need, and the system walks you through step by step.

Basic Investment Returns

Small-scale investors often overthink their tax obligations. If you've got a stocks and shares ISA, premium bonds, and modest savings accounts, your tax position remains simple. ISAs are tax-free, premium bond winnings aren't taxable, and you've got a £1,000 personal savings allowance (£500 for higher-rate taxpayers).

Even with taxable investments, if you're staying within your dividend allowance (£500 for 2024/25) and capital gains allowance (£3,000 for 2024/25), reporting is straightforward. Your investment platform provides annual statements showing exactly what you need to declare.

The online Self Assessment system handles these scenarios well. It calculates tax due on dividends and gains, applies the correct rates based on your income level, and clearly shows what you owe. As long as you're organised with your paperwork and understand basic investment taxation, professional help might be overkill.

Alternatives To Full Service Accountants

Tax Software Solutions

Tax software has revolutionised Self Assessment for many taxpayers. Platforms like FreeAgent, QuickBooks, and TaxScouts offer a middle ground between DIY and full accountancy services. They're significantly cheaper than accountants, whilst providing more support than HMRC's basic system.

These platforms excel at record-keeping throughout the year. Connect your bank accounts, photograph receipts, and categorise expenses as you go. Come January, your tax return practically completes itself. The software knows current tax rates, allowances, and rules, reducing error risk significantly.

Many include helpful features like tax estimators, letting you see your liability building throughout the year. Some even offer a limited professional review, where a qualified accountant checks your return before submission for a fraction of traditional accountancy fees. For straightforward self-employment or rental income, this often provides sufficient support.

One Off Tax Advice Services

Sometimes you don't need ongoing support, just expert input on specific questions. Platforms like Accountant Connector can match you with qualified professionals for one-off consultations. This approach works brilliantly when you're generally confident but need guidance on particular issues.

Maybe you're selling a property and need advice on capital gains tax, or you're starting to trade cryptocurrency and want to understand the implications. A two-hour consultation might cost £200-£400 but could save thousands in tax or prevent costly mistakes.

These services also work well as educational tools. Spend an hour with an accountant learning to complete your return properly, understanding what you can claim and why. Use this knowledge to handle future returns yourself, calling on professional help only when circumstances change significantly. It's like having a tax expert on speed dial without the ongoing commitment.

Conclusion

Using an accountant comes down to value. If they save you tax, reduce mistakes, or free up time, the fee is often worth it. If your finances are simple and you feel confident, filing yourself through HMRC online can be enough.

A good rule is this. The more moving parts you have, like business income, property, dividends, or multiple income sources, the more professional help tends to pay off. And it does not have to be forever. You can start solo and bring in help later, or use an accountant for one year to get everything set up properly.

Whatever you choose, do not leave it until the last minute. Late filing and rushed errors can cost more than a one-off consult. If you are unsure, getting quick advice can remove a lot of stress.

Frequently Asked Questions

What's the average cost of hiring an accountant for Self Assessment in the UK?

Basic Self Assessment services typically cost £150-£300 for straightforward returns. Freelancers with multiple income streams might pay £400-£600, whilst landlords with several properties or company directors could see bills exceeding £1,000 annually.

Can I switch from using an accountant to doing Self Assessment myself?

Yes, you can switch between professional help and DIY returns at any time. Many taxpayers use an accountant initially to learn the process, then handle simpler years themselves. You might also start solo and bring in help as your finances become more complex.

Is it worth using an accountant if I only have PAYE employment income?

Generally no. If your finances consist of one PAYE job, minimal savings interest, and no significant additional income, you can likely handle Self Assessment yourself using HMRC's online system, which guides you through the process step-by-step.

What qualifications should I look for when choosing a tax accountant?

Look for accountants with recognised qualifications like ACA, ACCA, or CTA (Chartered Tax Adviser). Check they're registered with a professional body, have professional indemnity insurance, and ideally have experience with clients in similar circumstances to yours.

Do accountants guarantee their work if HMRC investigates my return?

Most reputable accountants include investigation support in their fees and will handle HMRC correspondence on your behalf. Many offer professional indemnity insurance that covers their errors, though you remain ultimately responsible for your tax return's accuracy.