Be tax return ready!

With the current climate its never been more important to get your 2019/20 tax return completed and filed.

Many self-employed business owners now find they have more time on their hands so use this time to get your tax return done. If there are any announcements on additional benefits dependant on your earnings during 2019/20 you may need this to be ready to apply.

So what do you need to do?

If you have never filed a return before then, of course, this may seem daunting. You must have registered to file a self-assessment tax return with HMRC and you will need your UTR and Government Gateway login. This comes in the post so make sure you apply if you haven’t done this already.

If you do this annually and are used to it then don’t leave it to the last minute this year and get this done as soon as possible. If you are due a refund, then the sooner you complete your return, the sooner you get the refund!

Get your paperwork straight!

Are your receipts in a box or carrier bag waiting to be sorted!

Gather all the information you need to submit your return. This will be much easier for you if you have been using an online accounting system such as Xero. All the information will be there and all you need to do is ensure it is up to date.

If you have been using excel spreadsheets you will need to ensure you have entered all your income and expenditure.

Make sure you have paid close attention to your record keeping. Check your bank records against your income and expenses and that you have all relevant receipts. Reconcile your bank statement to ensure your figures are correct.

Frequently asked questions

I haven’t made a profit do I still need to do a tax return?

HMRC says that you need to send a tax return and pay your tax bill through Self Assessment if, in the last tax year, you were:

· a self-employed sole trader earning more than £1,000

HMRC have a useful tool which you can use to check if you need to a tax return – click here 

Is there any other income or expenses I must include? 

Here is a list of additional incomes you may have, and you must include 

  • Property rental income – find out more info here
  • Any savings interest or dividends
  • Payments from tips/commission
  • Income from overseas 
  • Pension contributions
  • Benefits including State Pension, Child Benefit and Blind Person’s Allowance

What are the allowable expenses for small businesses?

There are several costs that you incur when running your business that you can claim back against your Self-Assessment tax bill.

Here is a list of the main items small businesses can claim:

  • Office rent & utilities including business rates 
  • Insurance 
  • Marketing costs including advertising, networking, website and IT 
  • Stationery
  • Phone Bills
  • Uniforms
  • Staff salaries or freelancer/subcontractors
  • Anything you need to buy to sell on -e.g. stock or raw materials
  • Bank charges 
  • If you are working from home, you can claim a percentage of business premises costs. This would include utilities, council tax, mortgage interest or rent, telephone and internet. You must find a ‘reasonable method’ of dividing the costs between personal and business use. They suggest using the number of rooms used for business purposes, or the time spent working from home.

Read our blog on tax deductibles here.

Every person/business has a unique set of circumstances and having an accountant who understands the tax system will benefit you by removing any worry or concerns you have. Filing a tax return incorrectly could result in a fine or a repayment later. You want to ensure you are paying the right amount of tax. 

If you decide to file this without speaking to an accountant just check, check and check again!!

We are of course happy to help you and advise you! Just call us.

7 Top Tips To Help You Pay Less Tax In 2016/17

At Spicer & Co. Chartered Accountants, we are always working to mitigate your tax liabilities as best we can. This can involve income tax, corporation tax and more! At the end of each tax year there is a great opportunity to do just that. Here are our top seven tips to help minimise your tax bill…

  1. Pension Contributions

Make the most of your opportunity to save tax by investing in a personal pension.

Subject to certain limits, pension contributions made personally are tax allowable – which means that the effective cost may be as little as 55p to invest £1 in a pension. If you don’t provide for your retirement, who else will?

  1. Utilise Your Spouse’s Tax Rate

Use legitimate ways to reduce your tax bills by transferring income taxed at higher rates to a spouse paying tax at a lower rate. At the very least you should aim to make sure that neither spouse wastes their £11,000 tax-free allowance in 2016-17, but early professional advice is essential. In particular, care needs to be taken not to divert income deriving from a spouse’s company if that spouse substantially performs the work.

  1. Investment Balance

Review your investments to ensure that they are appropriate and performing well. Most importantly, are they giving you the right balance of income and growth?

Before acting on this one you absolutely must take independent financial advice. Most people waste their Capital Gains Tax allowance each year. This is a way to use it!

  1. Investment Review

If some of your investments have done very well and grown in value, consider whether it is sensible to sell some of them to save yourself even higher tax bills in the future. Each year you can make tax-free gains of £11,100 (2016/17). “Bed and breakfasting” investments is no longer possible, but you may still be able to save tax by selling shares and buying them back more than 30 days later, or having your spouse buy them back.

  1. Life Assurance

Make sure your life assurance policies are in the name of your business, so you can get tax relief on them now. A little known rule allows you to claim tax relief through your company for any qualifying unfortunate event that they pay out, the proceeds are still tax free!

  1. Tax-Free Potential

Consider investments that give you a tax-free return.

For example: National Savings Certificates, Friendly Societies and ISAs. At present, you can invest up to £15,240 a year in an ISA and £4,080 in a Junior ISA. If you don’t use your allowance each year, you lose it. Again, before acting on this one you must take independent financial advice.

  1. Tax Relief on Gifts

If you are a higher rate tax payer make sure you can claim back the tax relief on any Gift Aid donations you made during the year.

We don’t disclaim any of the ideas within this blog. In fact, we are really quite proud of them! However, before you take any action you really should take advice on your personal circumstances.

The friendly tax experts at Spicer & Co would be delighted to help you. Contact us for a discussion without obligation… or jargon. Why pay more tax than necessary?

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Useful Methods Of Dealing with TERRORISM

The last a few ages have seen an exceptional grow in the sheer number of throughout the world acknowledged terror types and terror-similar fun-based activities. It has built a lot of state governments appreciate terrorism to provide a significant hazard to basic safety and with writing essays The most frequent types of terror exercises include things like operating aided by the aim to injure man existence, eradicate property, chance the general public wellbeing, and interrupt talk about, religious, or any other social activities. On other occasions, terrorists might challenge dangers to achieve their set goals. Thus, terrorists foster governmental, faith based, societal, racial, besides other ideological ideas these types of functions. Continue reading