It’s that dreaded time of year again, the Self Assessment deadline. It means that businesses up and down the country will be scrambling to get ready. If you’re new to business and haven’t yet submitted a tax return, try not to worry. If you’ve kept good records, the process should be fairly straight forward.
How to submit your tax return
If you’ve never sent a tax return you must enrol for the online service by creating a Government Gateway account. Then you can activate this by using the code HMRC will have sent you in the post.
Make sure you have your Unique Taxpayer Reference (UTR) to hand as well as details of any expenses you want to claim for. When you’re ready, you can begin your tax return submission here.
HMRC will then calculate how much you owe based on the financial records you submit so they must be accurate. You will need to pay this amount by 31 January.
Claim for expenses
It’s important that you claim for expenses as this will reduce your tax bill. If you’re taking money out of your profit to spend back on the business, it isn’t technically profit. So the amount of profit you will be taxed on will be less once these expenses are deducted. In order to claim you should keep records of all expenses including invoices and receipts.
Anything you claim for must be solely for the benefit of the business. So claiming on travel to work is not accepted but travel as part of work may be. For more information, you can take a look here.
What if you miss the deadline?
If you forget or underestimate the time it takes to send a tax return, you might be wondering what the consequences are of submitting late.
Unfortunately, there is a penalty of £100 for submissions up to three months late unless you’ve got a good reason for submitting late like illness, bereavement, fires, floods or computer failure. If you submit even later than this, then the penalty will go up.
New financial tips for 2018
Once you’ve got your tax return out of the way, you’re free to make more plans for your business. If you’ve found this year’s Self Assessment a bit stressful, here are some tips so that next year’s is a bit easier.
Keep thorough records of expenses
A lot of people forget and try to claim for things that they can’t really back up. This is not good news if HMRC ever decide to investigate you. Keep good records of all receipts, and store them in a secure place so they’re ready for your tax return.
Save a set percentage of income
Whether you work as a freelancer or limited company owner, it’s easy to forget to set aside enough money from for taxes and National Insurance when the time comes. The best way to manage this is to simply set aside an appropriate percentage, say 30% of all income you receive. That way you’ll stop yourself from dipping into tax money you’ll need by January.
It’s a long way until January 2019, but setting reminders now while you’re in the midst of a tax return is the best time to remind yourself in the future. Set alerts well ahead of time so that you can get everything in order before the next deadline.
Get an accountant
We may be a little biased on this but getting an accountant is one of our top recommendations if you haven’t already got one. Self Assessment is never going to be particularly fun but if you’re feeling the stress already, an accountant could help you cut down on this. They will steer you in the right direction to ensure you’re tax compliant and give you advice on how to remain tax efficient.
Join the cloud
Cloud accounting is the future. It’s cheaper, more accessible and can be managed remotely. No more loading up software installed on a computer, you can simply log into a cloud account and manage your transactions online or via an app on the go.
Our software Pandle is simple to use to manage transactions and send invoices wherever you are. If you need to share details, for example with your accountant or any other colleagues, then you can add users to the account. No more downloading software on multiple computers or being limited to only work on computers with the software installed.
Are you struggling with your tax return and need some help from an accountant? You can get a quote from us here within 30 seconds!
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About The Author
An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.