We are an ICAEW-accredited accountancy practice. Our accountants’ careers are focused on processing accounts and filing tax returns. It’s what we’ve been doing since 1995.
And we can tell you most of the people giving away tax advice on the internet have very little or no idea of what they are talking about. Instances of advice from ‘my best friend’s accountant husband who knows a lot about tax’ casually suggesting that ‘self-employed people can claim wages drawn from their business' are not so uncommon!
We’d like to politely advise that everyone has unique tax situations and the same general advice doesn’t apply to everyone. There are too many variables and it’s impossible to get the full picture without detailed probing.
Not to mention, very few people dispensing tax advice on the internet are qualified to analyse your tax situation. And the ones who are qualified, don’t do it for free!
You may trust your friends, but our recommendation is to be wary. Their good intentions can put you in a world of debt with HMRC. Plus, tax offences are a serious matter and have led to prosecution.
Here are our top 4 tips to protect yourself:
1. Tax advice you don’t understand is bad advice
Yes, tax is complicated. But every little thing about it can be understood, if properly explained by a professional tax agent. Ask plenty of questions to separate good advice from bad. Don’t take the advice unless you fully understand what has been explained.
2. It sounds too good to be true
It probably is! When you 'best friend's accountant husband' tells you that you can write off all your home or car expenses, what they are really telling you is 'this is how you can get into hot water'. Definitely, not your best choice for advice.
3. Beware of tax schemes
There are numerous schemes in the market that promise to lower your tax bill for little or no real cost. In our experience, most schemes simply do not work, and are bad as they violate tax law. You can find examples of tax avoidance schemes HMRC is looking at closely.
4. Not seeking any advice is bad for you
Even if you have filed your own tax return in the past but now have new circumstances, you will need advice. If you made profits from things like shares or a second home, had income from abroad, are a trustee of a trust, or your savings or investment income was £10,000 or more before tax, you should seek advice.
Get professional advice
Qualified accountants and tax agents are well trained, abide to the rules of professional ethics and are required to keep themselves updated. Agree, they are more expensive than getting advice from your ‘best friend’s accountant husband’ but think of it as insurance. You pay a small premium today to protect against the financial impact of tomorrow.