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
- Marketing costs including advertising, networking, website and IT
- Phone Bills
- 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.