How to get a bad accountant (updated July 2009)
Firstly, get a good accountant. Then wait until January to take in your books and records. Wait for him/her to die of a coronary trying to get everything in to the Revenue by 31 January. Now go find a bad accountant; all the good ones have been killed off!
You would not believe how many people leave it to the last minute to deal with their tax affairs. Let’s try to put this into perspective – for anyone who is self-employed, there is a gap between the end of your accounting year and the date when the tax return based on that year must be delivered to the Revenue. The relationship between accounting date and tax return is very simple:
1. The tax year runs from 6 April to 5 April;
2. You are taxed on your accounts ending between those dates.
So, your accounts to 30 April 2009 will be taxed in the 2009/10-year. If your accounting date is 31 March, your 31 March 2010 accounts will be taxed in the same year.
The latest date your 2009/10 Tax Return can be delivered (electronically) to the Revenue, without incurring a late filing penalty, is 31 January 2010. This means that you have at least 10 months and possibly as much as 21 months to prepare your accounts. And there are definite advantages to preparing your accounts as soon as possible after the end date.
First, if your accountant comes up with awkward questions about some of the receipts and payments, you have far more chance of remembering what they were for within three months of your year-end, than if it is 9 months or more later.
Secondly, it gives you a much greater chance to plan not only your cash flow for the future, but also to engage in pension planning and in Capital Gains Tax planning.
Thirdly, it could reduce your tax bill in July.
Not only does this put you ahead of the game, but also, reduces the stress on your poor, overworked (in January at least) accountant.