Tax - Do we have to use accountant

[duwi]

Hi there -

My IPs is under an LAQC company.
Its nearly end of tax year.

My questions: do we HAVE TO use an accountant and auditor because my IP is under a company? I have read through some guides from IRD and it seems its very stright forward + I took 2 Accounting subjects at uni many years ago

Accounting fees are claimable. But.. we only can get 39% MAX (the higest tax rate) out of that fees back. So its not really free service, isnt it?

[xris]

Hello duwi,

As a general comment, I have lost money – and in some cases quite a lot of money – by doing things myself, including on occasions my own accounting.

Sometimes the loss is hidden at the time and disguised as “I saved money by doing it myself and not paying a professional’, and only appears at a future date. By then of course, it is too late.

So my advice is use an accountant.

xris

[cube]

Xris's advise is good, but to answer your question, no you don't HAVE to use an accountant.

Without up to date knowledge of IRD practice (e.g. interpretation of depreciation rules, changes in obligations under the consumer credit act, latest rules on claimable expenses), you may miss a deduction to which you are entitled.

Worse, you may claim something to which you are no longer entitled and ignorance is no excuse.

Having said that, is there a rule in Accountancy 101 that says "Accountants Fee" = "Tax Rebate"?

cube

[CJ]

It depends on your level of Knowledge in my opinion and how much you value your time.

I have suggested to another person on this forum (fudosan I think) who wast getting any value add out of his accountant to do it himself and then take to accountant for review only (not preparation) and a strategic meeting.

The advantages of this are:
- still get professional input
- save on preparation costs
- your input gives you a better understading of how it works.

I guess this give you a third option to what you have previously suggested. Do a search (not sure what on) but I think there is quite a long thread with with more comments by me and others on this topic.

[RentMaster]

I would also suggest using an accountant. Particularly in the first year. They might be able to give you some good advice on what you can claim that you had not thought of. They also might stop you from doing something you thought was legal but wasn't. Also advice of structuring things. It is money well spent.

I also suggets shopping around for accountants. Their fees vary quite wildly. From a few hundred to a few thousand.

[Chemill]

Hi duwi

That was my attitude at the start too, but I went to an accountant - they know many tricks of the trade that are not taught at uni or are not mentioned in ird info.
Chemill

[Perry]

Fiscal Joint Venture

At the risk of stating the very obvious, look for an accountant
who is a Property Investor.

My experience is that the majority of accountants are very
conservative. I have pressed points of view on the basis of my
own sketchy understanding and there has been a financial
benefit to me. That's a form of what's been said before and one
I endorse. Don't just leave it to the Accontant. Get clued-
up a bit, yourself, so that you're 'partnering' with the Accountant.
Not abandoning it to the Accountant.

One other oft-overlooked advantage is that the final date
for the lodgement of tax returns moves from July to March
under a special arrangement between the IRD and Accountants.
This can be useful if you're busy and have trouble getting
all the paperwork together on time.

Another aspect is that the accountancy costs for sole traders
is very small compared to other entities like Trusts or companies.
Something to do with the requirements of the Financial Reporting
Act, rather than complexity.