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What is a tax accountant?

We've updated this guide on 15th February 2021

A tax accountant is an accountant who is trained in the changing rules and regulations of UK tax. They will advise you how much tax you owe based on what you earn, they can help you avoid being penalised by HMRC and they can help you with day-to-day tax efficiencies.

Here’s a list of services a they can help you with:

  • Bookkeeping
  • Helping you pay the correct tax 
  • Comply with changing rules and regulations
  • Improve your tax efficiency (more on this later)
  • Helping with your tax return
  • Get your Unique Taxpayer Reference (UTR) number
  • Advise on tax liabilities when you move abroad
  • Expenses

What does tax efficiency mean?

When we talk about improving your tax efficiency, it means making certain financial decisions that will reduce your tax bill. 

An example of this would be when you start earning between £100,000 and £120,000, you might redistribute your income to avoid being taxed at 60% by:

  • Saving more into your pension
  • Asking for a non-cash bonus instead of a cash one (e.g. a company car, medical insurance etc.)
  • Invest in a startup

Be mindful that tax efficiency should not be confused with tax evasion. Efficiency is when you use tax reliefs available to prevent your income from being stung by large taxes. Tax evasion is when you deliberately go against the law to avoid paying taxes that you’re liable to pay. 

Read more about tax efficiency here.

How much does a tax accountant cost?

This can vary depending on where you go. 

Many tax accountants charge monthly – and this can cost from £150 to £300 to more a month. Others charge hourly rates from between £25-35 for basic services and £125-£150 for more specialised services. 

In contrast, we charge £119 as a flat fee for a tax return at TaxScouts, which is much less that you might ordinarily pay when you go to a traditional accounting practice. We’re often asked questions about how our fees work so here’s a quick rundown to help you get your head around it!

How is TaxScouts’ flat fee calculated? 

It’s important to try not to be swindled when you choose who to do your tax accounting with. Some dodgy accountants prey on the fact that many of us don’t know very much about tax, and that the industry can be intimidatingly complicated. They might charge you sky high for admin or add hidden costs for services you don’t need.

To help you out, we wrote a blog to make it easier to spot a dodgy accountant. Take a look at it to get clued up. 

Can anyone be a tax accountant?

Technically, yes. You don’t have to be qualified by the UK accounting bodies to describe yourself as a tax accountant. That’s why it’s really important to do some research before paying someone to help you sort your taxes out of panic. 

Check out this list of regulatory bodies that a qualified UK accountant should be a part of.

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