Getting Professional Financial Help
There are a number of occasions and situations where you may require some professional financial help to assist with dealing with complex financial affairs such as tax returns, large purchases, or perhaps making a will. In these, and other, instances you may well find that hiring professional help will save you a lot of time and money, not to mention providing you with the reassurance that your finances are put in order and in line with your legal obligations.
The following situations may require some financial assistance; usually an accountant or a solicitor will be able to help you. Click on any situation to show more advice on the subject.
• Personal Tax Return.
• Self Employed Tax Return
• Purchasing a House
• Making a Will
• Selling Land
When hiring professional financial help make sure that the you chose a reputable individual or company with the appropriate qualifications. It may help to try and get some personal recommendations before hiring the financial assistance. If you are getting an accountant or a solicitor make sure that they are chartered/registered with the relevant body, example links of some of the bodies can be found below:
Chartered Accountants
England and Wales - http://www.icaewfirms.co.uk/
Scotland - http://www.icas.org.uk
Global - http://www.accaglobal.com
Regulated Solicitors
All practicing solicitors in the UK need to be a member of the relevant solicitor's body who provide a code of conduct and regulation for the solicitors.
England and Wales - http://www.sra.org.uk
Scotland - http://www.lawscot.org.uk
Self Assessment Tax Return
If you earn a significant amount of money per year in the UK, or have complexities in your financial situation then you will probably have to file a personal tax return. The following list gives some examples of when you should fill in a personal tax return:
• If you are self-employed
• If you earn more than £2,500 a year from letting property or land (unless under the rent a room scheme)
• If you have any other income that can't be taxed through the pay as you earn (PAYE) system
• If you get money from a trust or settlement
• If you receive taxable income from abroad
• If you have complex tax affairs, e.g. higher rate taxpayers or company directors.
• If you have a yearly income from savings and investments of more than £10,000 (before tax)
• If you have a yearly income of more than £100,000 (regardless of its source)
If you have made capital gain (or loss) as a result of selling or giving away assets, such as property or shares then you may also need to fill in a tax return.
If you know that you have not paid the correct amount of tax on your income for a particular tax year, you should contact your local tax office as soon as possible. Otherwise, you may incur penalties or pay more tax than you need. If you have received taxable income and you haven't received a tax return, you must tell the tax man by no later than the 6 October following the end of the tax year in which the income was received. If you fail to do so, this can lead to penalties and interest on the outstanding tax.
An accountant will be able to help you with all aspects of filling in a personal tax return, providing that you can give them all the relevant information that they require. You should therefore keep records of all your income and expenditures if you believe you will have to fill in a tax return. In particular pay slips, P60's, P45's and P11D's should be retained.
You do not need to use an accountant to fill out your personal tax return, you can chose to do it yourself, either by filling out a paper return, or by using the online system (http://www.whatprice.co.uk/financial/self-assessment-tax-return.html) at HMRC. However an accountant will be able to ensure that you do not make any mistakes (you ARE liable for any mistakes in your tax return, no matter how complicated and convolute the rules may be) and may also be able to help to reduce your overall tax bill. Expect to pay between £200 and £400 to an accountant for filling in your tax return, but this will vary depending on the complexity of their tax affairs.
Self Employed Tax Return
If you are self employed in a partnership then you will need to file the relevant tax return each year. In this return you'll need to fill out details of all your self employed income and what your business expenses were, along with capital equipment purchases and other transactions that are relevant to your business. Taking all these factors into account will allow you to produce a figure for the total profit that the business made. You will then have to take this profit as ‘drawings' and will pay income tax and national insurance on the amount drawn, subject to the usual thresholds and limits.
This tax return is distinctly separate from your self-assessment tax return! I.e. if you file a self employed tax return you will have to file a self assessment tax return as well.
It may well be wise to get an accountant to draw up your self employed or partnership tax return for you. They will be able to advise you on what business expenses are allowable, what you can and cant claim as tax relief, and perform the calculations required to write-down capital equipment.
If you do hire an accountant to do these accounts for you then you should expect them to produce a document for you detailing the accounts of the business, including a profit and loss balance sheet. They should also file your partnership tax return for you and provide you with the information that you require to file your own self-assessment tax return as well.
You can of course get your accountant to fill in your self assessment tax return for you as well!
Expect to pay between £400 and £800 to get a chartered accountant to prepare you self employed accounts and file the business tax return for you. This figure will obviously vary depending on your business turnover, number of transactions and overall tax complexity.
Purchasing a House
Purchasing a house will be for many the largest financial transaction that they ever make, and so it is worth making sure that you take as much as advice as possible from the professionals. We at Whatprice have produce a quick guide to purchasing a house, which can be found at http://www.whatprice.co.uk/financial/housing-market/house-buying-guide.html
When purchasing a house you will almost certainly require the services of a solicitor to assist you in the purchase. It can often be helpful to use a local solicitor as they should have a relationship with the local planners and will understand and local regulations.
The solicitor will be in charge of drawing up the contract to purchase the house, performing searches on the land (planning applications, environmental issues etc) and calculating the stamp duty and any other taxes due on the purchase.
The costs of hiring a solicitor for purchasing a house can vary a great deal depending on the complexity of the house sale, however you can expect to pay anywhere between £600 and £1000 for a typical house purchase.
Making a Will
If you do not have a Will then government laws will decide who inherits your possessions, money, property and any other assets you may have. If you die without leaving a will then the following web page will help to determine where your inheritance will go Government Advice on Wills
In summary, if you are married then the first £125,000 will go to your spouse, with the rest being divided between the spouse, parents (if any), children (if any), grandchildren, siblings etc.
If you aren't married but live with a partner then they will not automatically get a share of the estate, instead they would have to make a special claim for the inheritance.
In all other circumstances your estate will given to the following in order of priority:
• Children
• Parents
• Brothers and Sisters
• Half Brothers and Sisters
• Grandparents
• Aunts and Uncles
• Half Aunts and Uncles
• The Crown (e.g. the government)
e.g if you have no children, parents, siblings, half siblings or grandparents then the inheritance would be divided equally amongst your Aunts and Uncles. If you have no Aunts, Uncles or half aunts and uncles then all your estate would go to the government.
If you DO leave a will then you can instead decide exactly who gets a share of your inheritance and how much each person is entitled to.
The simplest Will you can make is one where all your estate is passed directly to one other person. For this you could draw up the Will yourself, or purchase a template from a book store. However to ensure that your Will is created correctly you should employ a solicitor to draw one up for you. A simple Will should cost between £150 and £250, giving you the piece of mind in knowing that everything will be in order after your death.
When drawing up a will you should consider:
• how much money and what property and possessions you have
• who you want to benefit from your will
• who should look after any children under 18 years of age
• who is going to sort out your estate and carry out your wishes after your death - that is your executor
To search for solicitors who specialize in drawing up wills use the following link Lawsociety - Find a Solicitor
The fee for writing a Will will increase along with its complexity. If you intend to leave multiple parts of your estate to different people, donate to charity, include caveats on the inheritance money, set up a family trust etc then the cost of the Will could increase quite rapidly.
Often if a solicitor draws up a Will for you then they can store the official copy of it for you free of charge.
Selling Land
If you are lucky enough to own some land then if you chose to sell it at any point you will probably need to employ the assistance of a solicitor to help you through the legal and financial complexities associated with land sale. You may also need to employ an agent who will deal with all the marketing and sales related activities, much like an estate agent would for your house. These agents may charge a flat fee or anything between 1% and 5% of the sale price of the land.
Your solicitor will be able to advise you further on the steps you need to take to sell the land, if it is agricultural land then you will have less (but still some!) considerations to worry about. If the land is prime building land then there will be a large number of searches and legalities that will need to be resolved before the sale can go ahead (e.g. environmental searches, rights of was, access to the site, road agreements, sewers, provision of electricity, boundaries and planning consent). A full description of the details of selling and purchasing land can be found here - Primelocation
In all cases the land sale will usually be subject to Capital Gains Tax and Stamp Duty. You solicitor should calculate exactly how much you need to pay.
The cost of hiring a solicitor to assist with these matters will vary a great deal depending on the complexity of the sale. We at Whatprice would expect prices to start at £500 and climb up into the thousands (if not tens of thousands)
Please feel free to leave a comment about this page
Was this page useful? Do you have something to add? Do you disagree?
If your comments meet our
guidelines then we will publish them (you do not need to register!)
Or why not tell a friend and email
this
page to someone