Self Assessment: Accountant or DIY?

Navigating Self Assessment: Contractor Choices

Tax season can be a stressful time for UK contractors. The big question: should you tackle your self assessment tax return yourself, or bring in an accountant? Both options have their pros and cons, and the right answer depends on your situation. Let’s break it down so you can make a confident, informed decision.

What Is Self Assessment?

Self assessment is HMRC’s method for individuals to report income, calculate tax due, and pay any outstanding tax. As a contractor, you’re responsible for ensuring your annual tax return is accurate and submitted on time—typically by January 31st each year if filing online.

Doing It Yourself: The DIY Route

Many contractors consider handling self assessment solo. Here’s why it might appeal:

• Cost savings: No fees for professional help

• Full control: You manage every step

• Learning opportunity: Understand your finances intimately

But there are some drawbacks:

• Time-consuming: Gathering records and navigating HMRC’s system can eat into your billable hours

• Complex rules: Tax allowances, expenses, and regulations change often

• Risk of mistakes: Errors can lead to penalties or missed savings

When DIY Might Work Well

• Your affairs are straightforward (single income stream, few expenses)

• You’re comfortable with numbers and HMRC jargon

• You have time to dedicate to learning the process

Hiring an Accountant: The Professional Touch

Accountants bring expertise and peace of mind. Here’s what they offer:

• Expert knowledge: Navigate complex tax rules and spot savings

• Time saved: Focus on your contracts, not tax admin

• Reduced risk: Lower chance of penalties or compliance issues

• Year-round support: Advice beyond just filing returns

However, consider:

• Cost: Professional fees can range from £200-£500+ per year

• Less direct control: You rely on someone else for deadlines and details

When an Accountant Makes Sense

• You have multiple income sources or claim significant expenses

• Your company structure is complex (e.g., limited company, IR35 concerns)

• You value peace of mind and want to focus on your core work

At-a-Glance Comparison

What Do Other Contractors Say?

“I started out doing my own returns, but as my business grew it became overwhelming. My accountant found savings I’d missed and keeps me compliant.” – Sarah, IT contractor

“The DIY route worked for me when I was just starting out, but now I’d rather spend the time finding new contracts.” – Tom, engineering consultant

Next Steps for Contractors

• Assess your needs: Consider the complexity of your finances and your comfort with tax rules

• Try a hybrid approach: Some contractors use accounting software for DIY but consult an accountant for tricky questions

• Get quotes: Shop around for accountants who specialise in contractor tax returns

• Stay informed: Even if you use an accountant, understanding your obligations helps avoid surprises

The Bottom Line

There’s no one-size-fits-all answer. If your tax situation is simple and you enjoy managing your finances, DIY could work. But if your time is better spent on your contracting work—or if you want the confidence of professional support—an accountant is a sound investment.

Take Action

Ready to make a decision? Start by reviewing your last tax return. If it felt overwhelming, or you’re unsure about deductions and compliance, now is a great time to explore professional help. Alternatively, if you’re confident in your skills, use HMRC’s resources to guide your next submission. Whatever you decide, staying proactive will help you avoid last-minute stress and costly mistakes.