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Should you do your own company tax return or hire an accountant?

What are the pros and cons of filing your own company tax return? Would you recommend going through an accountant instead?

Top voted answer
Ian Harris

Ian Harris, Partner at B+I Lockwood Accountants

Top 10% Tax

Why would anyone consider doing it themselves unless they had experience in company tax?
There are many issues:

  1. What income do you and dont you pay tax on?
  2. What items are deductible and which are not?
  3. Which penalties are deductible?
  4. Which legal fees are deductible and which arent?
  5. Does the company get a 50% discount on its taxable capital gain?
  6. What is this imputation credit thing all about?
  7. Under what circumstances will previous years losses be available for offset against the taxable income?
  8. On what basis do I lodge this return---cash or accruals?
  9. How do I choose to lodge it on a cash basis?
  10. What special deductions are available?
These are just a sample of the issues and questions you would need to answer if you were doing it yourself.

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Kirsty Fox

Kirsty Fox, Principal at

Top 10% Tax

No. Tax legislation is complicated, and if you get it wrong, the excuse of "I didn't know" doesn't cut it.  There are many variables that have to be considered, just like Ian has mentioned, and I would add the following -

Have you taken money out of the company and not declared it as wages?
Do you owe your company money?

Both of these questions have ramifications on how those funds are treated.

Also, are you trading whilst insolvent?

It's just not worth the risk of preparing the company tax return yourself.

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Amanda Hoffmann - Certified Bookkeeper, BAS Agent

Amanda Hoffmann - Certified Bookkeeper, BAS Agent, Owner / Manager ★ Certified Bookkeeper ★ BAS Agent at My Office Books - Virtual Bookkeeper & BAS Agent

Top 10% Accounting

I am going to be the devil's advocate and say .... it depends.

 

TURNING OVER $60 OR LESS - TAX HELP PROGRAM

If you are earning under 60k a year, you can complete your own tax return for FREE with professional assistance from the Australian Taxation Office via their Tax Help Program See https://www.ato.gov.au/Individuals/Lodging-your-tax-return/Tax-Help-program/

 

UNWISE CHOICE

If you are earning over 60k and particularly if you are GST registered, then doing your own company tax would be extremely unwise. As per the last two comments gaining insight and professional assistance is the smart way to go.

 

SELECT WISELY

There are many accountants out there who are competent, caring, professional and trustworthy. There are others who are cheap, unregistered and dishonest also. 

 

1. Before selecting an accountant check the Tax Practitioner Board website to ensure that they are actually registered to complete tax returns. 

https://www.tpb.gov.au/registrations_search

 

2. Do they have a fixed price or value priced model?

Fixed price is easy, to complete your tax return it will cost A, B or C very straight forward. 

 

Value priced is where I would be very careful.

Ask them

What "value" are you giving me?

What services are included in your fee?

Are you charging me for software or other fees and charges?

Does the fee include a monthly, quarterly or annual business review?

If they include bookkeeping, is it by registered Australian BAS Agent staff OR is it overseas outsourced work?

Is the tax service they are offering from the agent you speak with, or is it outsourced overseas?

Ask lots and lots of questions. In the tax world "Value Pricing" has become a catch cry to CHARGE like a wounded bull offering entirely NO value whatsoever. 

 

 

Hatty Bell

Hatty Bell, Community Manager at

Great insight @Amanda Hoffmann - Certified Bookkeeper, BAS Agent - it's great to hear different sides of the conversation.

What's the difference between fixed and value priced model? Fixed is obvious, but value priced?

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Amanda Hoffmann - Certified Bookkeeper, BAS Agent

Amanda Hoffmann - Certified Bookkeeper, BAS Agent, Owner / Manager ★ Certified Bookkeeper ★ BAS Agent at My Office Books - Virtual Bookkeeper & BAS Agent

Top 10% Accounting

Value-based pricing is a strategy being used more often by accounting and even bookkeeping firms. The price is set by their ideal client's perceived value of a product or service.

Value pricing is customer-focused pricing, meaning companies base their pricing on how much the customer believes a product is worth. They take into consideration the demand for their services/product, years of experience, reputation, size, and many other factors. 

Example
Accounting Firm A
Focuses on e-commerce clients who use Etsy, Facebook Store, and other online sales formats. They are world-class in their expertise in this area and have many valuable connections. They have a reputation to not only solve complex problems but give advice that assists their clients to automate administrative duties. 
Not many firms "niche" in this area. The avatar's perception of value due to their expertise empowers them to value price their services at a higher amount than other firms who service any business. 

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