Contractor accounts can be just as complicated as any other kind. There will be incoming money as well as outgoings, and there may even be subcontractors to pay. A tax return accountant will be able to organize all of this into a coherent tax return. You will know it is time to complete a return when you receive a form.
What Happens If You Make A Mistake?
Mistakes can easily be made on a self-assessment tax return if you are not used to completing one. Contractor accounts can be made up of many different elements, and it could be that something is missed out. Something that is easy to rectify – and notice – is if the address on your return is wrong. If you have moved, you should let the government know immediately so that they can update their records. If you don’t, you should let them know once you realize there is an error on the form.
Other mistakes may be harder to identify. If you do realize something is wrong, the government need to know straight away. Otherwise, you could be penalized and if the government believe you used the wrong figures on purpose, you can even get a criminal conviction.
Checking and re-checking your tax return before you send it off is essential. Or, if you are worried that you might make a mistake (and it does happen easily), engage an accountant to complete the return for you. Many people leave their tax returns until the last minute because filling it in is a hard task, and a laborious one too. But getting in touch with a contractor accountant will make the work much quicker and easier, and will prevent you from getting a fine or worse. It makes sense to hire an expert to get the job done, leaving you with much less worry. You would hire experts for other aspects of the business, so why not this one? This is especially important if you have gone through a year of change, for example, if you are in the process of acquiring a competitor or you have a second income coming from a different source.
Is It Possible To Avoid Penalties?
If you miss the deadline for sending in your self-assessment tax return, you will generally be fined. However, if you have a ‘reasonable excuse’ for being late, you may be exempt if it was entirely out of your control. Hiring an accountant should mean you never have to have this problem, but if you do your excuse must be made as soon as possible. Examples of reasonable excuses could include documents being lost due to a fire or a flood. Equally, if documents are stolen and you are unable to replace them, this may also count. If you suffered from a life-threatening illness and you had to stay in hospital and where therefore unable to complete your tax return, this will usually also count. So too does the death of a partner just before the filing date (although you may be asked to show that you had started preparations to complete the return before it happened).