This blog answers the question “How Much Do Accountants Charge For Tax Returns?” The charges for personal tax accounting returns can vary, depending on whether you are filing just a self assessment or are a business entity (or sole trader) reporting its taxes.

How Much Do Accountants Charge For Tax Returns?

UK accountants normally charge a yearly fee of £150 to £200 for self-assessment tax returns. The fee charged by accountants for VAT returns depends on your turnover or revenue. For turnover of 0 to £100,000 a fee of £100. For a turnover of £100,000 to £200,000 a fee of £150

The business or individual account for which you require to declare tax returns determines the amount your accountant will charge you for it. Tax returns are usually declared in these common situations:

  • Having untaxed savings or income from investments in bonds, shares or securities
  • Getting income from sources located abroad
  • Being the Director of a company

Running a business as self-employed or under a partnership enterprise

  • You are not resident in the UK and have worked in another country.
  • Being a homeowner who is leasing out a property to tenants (and has to declare taxes on these earnings)
  • Your annual income exceeds £50,000 and your or someone living with you claims Child Benefit Support payments.

What information do I need to complete the Self Assessment form (SA 100)?

You will require the following information for completing your self assessment form:

  • Your (ten digit) unique tax account number
  • Your National Insurance Number
  • Any pension payments or benefits which you receive that may be eligible for discounts

When filling out the main tax return SA 100 you will come across different sections. The income section is for declaring untaxed income earned from interest payments on bank account deposits. The income section is also about information relating to money earned from investments (such as shares).

The Pensions, annuities and benefits section is mostly for pension age taxpayers. The entire annual state pension amount needs to be entered here as well as any gross pension amount consisting of a lump sum payment. Any lump sum annuity payments received by the pensioner.

Under benefits you will need to enter the payments received from the Jobseeker’s Allowance and Incapacity Benefit. You are also required to enter the aggregate sum of all the taxable benefits payments you are receiving. Other headings of the SA 100 Self Assessment tax return include:

  • Pension Contributions
  • Charitable Donations
  • Blind Person’s Allowance (if you are a claimant)
  • Student Loan Repayments
  • High Income Child Benefit Charge
  • Marriage Allowance

There are supplementary sections in the form for surplus income earned from self employment. There are also additional sections for income from property and income from capital gains.

Your self assessment tax return deadline is 31st January.

Which tax standards does HMRC expect accountants to adhere to when advising clients on declaring tax returns?

HMRC expects accountants to adhere to the following tax standards when  advising clients on declaring tax returns:

Lawful conduct

HMRC expects tax accountants to follow the official rules for declaring the income and expenses of their clients. Not misinterpreting or violating a tax standard with the aim of covering up someone’s debts.HMRC is responsible for making sure that tax returns are declared in accordance with the Finance Act (2022).

The tax accounting rules are updated through new legislation regularly and professional accountants must take any amendments to law into account before preparing financial statements. Accountants are required to inform their clients regarding any grey areas in the laws relating to their tax returns.

The chances of their tax returns being rejected by the HMRC or the chances of being taken to court for providing misleading information need to be timely communicated to the client. Also the expenses involved in hiring lawyers or attending court hearings need to be assessed when making certain judgements (regarding material uncertainty) on a client’s tax declaration.

Disclosure and Transparency

HMRC expects all accounting disclosures which are made by tax accountants to state the facts in a plain and obvious manner. The financial statements created by tax accountants need to be impartial and realistic.

Advising on Tax Planning Arrangements

Accounting agents are not permitted to create, support or advance their own accounting standards which are contrary to the targeted outcomes of approved laws related to financial accounting. Accountants need to avoid creating, supporting or advancing tax accounting standards which are fabricated and specifically designed to exploit the shortcomings of tax reporting laws.

Professional Judgement and Appropriate Documentation

HMRC expects its accountants to display professional judgement in applying accounting standards to specific client details to be published in financial statements. The appropriate documentation evidence required to justify each entry must be attached with the accounting returns.

The tax accountant also needs to preserve notes explaining his “reasoning for judgement” exercised to comply with these professional accounting requirements.

What is the Financial Reporting Council and what does it do?

The Financial Reporting Council is the national regulator for workers involved in accounting and auditing occupations. The FRC Conduct Committee is responsible for the supervision of the Financial Reporting Council’s enquiries and investigations. It makes sure that all investigations are carried out impartially and according to the laws of the  relevant legislation.

The Supervision Committee advises the FRC board on the discharge of statutory duties, delegated to it by the Secretary of State, UK (under Section 457 of the Companies Act 2006) The Committee carries out its functions with the aim of serving the common good through promoting a high quality of accounting, auditing and other financial reporting standards.

The FRC also sets the UK’s corporate governance and stewardship codes. The Financial Reporting Council was first created in the 1980’s as an organisation committed to promoting high quality financial accounting (in the private sector). At first it consisted of two committees namely The Accounting Standards Board and the Financial Reporting Review Panel.

The Swift Report recommended that the Financial Reporting Council also take up formal responsibility for audit and accounting regulation in the UK (legalised under the Finance Act 2004)

The Audit Inspection Unit of the Financial Reporting Council inspects the audit statements of listed companies. Nearly 100 audit reports (selected by a risk model) are analysed by the audit inspection unit each year

What is the Professional Conduct in Relation to Taxation or PCRT standard and how is it applied?

The largest accountancy firms and professional tax agencies share a common standard known as the “Professional Conduct in Relation to Taxation” standard. The 3 fundamental principles which form the PCRT standard are the following:

Integrity

Integrity involves being honest and declaring all pertinent information relating to their client. It also includes not to mention (directly or indirectly) in their tax declarations that HMRC formally regulates or checks their work.

Professional Competence

These criteria for assessment include correctly guiding clients regarding any attempt or request to window dress(personal) accounting statements. Any such action or misstating the actual finances of the client to present a “safe” financial position on the reports could also land the accountant into trouble.

The resulting tax evasion case from this false reporting situation is likely to lead to a criminal investigation. Being caught in such a blatant breach of financial laws could cause long term damage to the professional reputation of the concerned accountant.To be professionally competent would mean that the accountant ceases to work for a client who refuses to fix errors contained in their tax returns.

Being well read and updated with the current legislation and accounting procedures being used by the financial system. Each accountant should have professional knowledge about the tax area in which they specialise.

Maintaining the protection of their accounting records, current HMRC record credentials and other professional work in the face of the latest security threats in the UK. Professional competence is also proven by acting to avoid any mistakes in the calculation of their clients taxation amount figures and ensure accuracy upto a high degree.

Due Care and Professional Behaviour

The criteria of professional behaviour as an accountant involve having well set out “terms of engagement” with the client. It also includes dealing professionally and politely with HMRC personnel. It also includes making sure that their tax matters are free of mistakes and in line with the latest accounting principles.

HMRC also expects tax agents to be registered under and in compliance with the Money
Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.

What is HMRC’s guidance regarding tax implications of FRS-105 accounts?

The HMRC has issued guidance regarding the new tax rules for small business accounts. When accounting for errors a small business will correct material errors in a retrospective manner wherever possible. The errors not considered under “material errors” are accounted for by using prior period adjustment techniques.

What are the basic property tax accounting rules?

The basic property tax accounting covenants include counting all the income received from leasing property as “one property business”. Any such property business income will also be recognized as investment activity. Capital allowances which are created in the property rental business are to be credited or deducted in the form of an “allowable expense”

Rental income received from a property located abroad is to be taxed as a “single overseas property business”

Conclusion

This blog post addressed the question “How Much Do Accountants Charge For Tax Returns?”

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Frequently Asked Questions (FAQs) : How Much Do Accountants Charge For Tax Returns?

What are the standards to be followed by tax agents or personal accountants?

The standards laid down by HMRC to be followed by tax agents or personal accountants relate to the following aspects of tax collection:

  • Integrity involves being honest and declaring all pertinent information relating to their client. It also includes not to mention (directly or indirectly) in their tax declarations that HMRC formally regulates or checks their work.
  • Professional Competance

This criteria for assessment includes correctly guiding clients regarding any attempt or request to window dress(personal) accounting statements. Any such action or misstating the actual finances of the client to present a “safe” financial position on the reports could also land the accountant into trouble.

  • Due Care and Professional Behaviour

           The criteria of professional behaviour as an accountant involves having well set out “terms of engagement” with the client. It also includes dealing professionally and politely with HMRC personnel. It also includes making sure that their tax matters are free of mistakes and in line with the latest accounting principles.

What happens when HMRC standards are breached by tax accountants?

In case these standards are breached, HMRC can:

  • Report cases of malpractice to professional tax agencies for them to investigate the matter in detail and for formal penalties against the tax accountant
  • In cases where tax accountants have hidden the facts they can be barred from dealing with HMRC or HMRC can pursue a criminal case against their actions. HMRC also has the power to prevent access to certain online services for filing tax returns for such tax agents,
  • HMRC has an Agent Compliance Team which is tasked with holding regular advisory meetings with tax agents to discuss their performance

How can I complete the tax returns for a person who has died?

You need to complete a Self Assessment tax return form for a person who has died in case HMRC has informed you to do so. For filing these returns you will require details of the deceased person’s bank accounts which include:

  • Building society pass books
  • Dividend vouchers
  • National savings certificates
  • Bank account statements

In case the deceased person was employed or on a pension scheme you will need:

  • Work payslips
  • Pension payment receipts
  • Confirmation letters of any state pensions received
  • Details of any amounts paid by their employer

You can send in these completed tax returns by post to HMRC at this address:

Self Assessment

HM Revenue and Customs

BX9 1AS

United Kingdom

In case you are acting as an executor of the person who has died, you also have to:

  • Get registered on the HMRC website or through post
  • Send in tax returns for the deceased person’s estate each year