Top Tips for Completing Your 2013/2014 Self Assessment Tax Return
Completing a Self Assessment tax return is one of those yearly chores that many self-employed workers dread. Digging out old sales receipts, invoices, bank statements and expense receipts is hardly a walk in the park for experienced self-employed workers, and for first-timers it can be downright daunting.
Easy Accountancy provides a low-cost, quick turnaround, stress-free Self Assessment tax return service for a one off, fixed fee. Whether you are a sole trader, freelancer, self-employed individual, limited company director or have any extra income that needs declaring, we can help you.
Your time is precious and the challenging task of getting your head around the complex tax system can seem a mountain to climb. HM Revenue and Customs (HMRC) have created a 35 page “How to guide”, which is too long for most self-employed workers to find the time to both read and understand. The added pressure of having to complete your return on time and the worry that it is all completed correctly leaves many self-employed individuals searching for a simpler alternative.
Easy Accountancy’s Self Assessment tax return service includes access to your own dedicated accountant who will analyse your income and expenditure, before reviewing your return with you and submitting it to HMRC on your behalf.
All of our accountants are fully qualified, experts in their field with experience completing hundreds of tax returns. If you would like some more information on how Easy Accountancy can help you please contact us on 0500 234111 or email email@example.com.
Tax can seem a confusing topic, so it is not surprising that we are always asked lots of questions by our clients. To help self-employed individuals and small business owners get their heads around what can appear to be a bewildering topic, we have created our top tips to help anyone who is struggling to complete their tax return for the 2013/14 financial year.
1. Know why you are required to submit a return
The whole purpose of a tax return is to make HMRC aware of your income, business expenditure and any other profits on your business assets so that they can calculate how much tax you need to pay for the year. Tax returns also help HMRC work out if they owe you any tax, which you may have overpaid in previous years.
2. Know if you need to complete a return
If you are self-employed and are paid outside of Pay As Your Earn (PAYE), which is when your salary is paid by your employer with tax already deducted, then chances are you will need to complete a tax return.
Other people that are required to submit a tax return include higher income parents who receive child benefit and those who receive a second income such as landlords and eBay sellers.
If you have already registered as a sole trader with HMRC, then you should receive a notification reminding you to complete your tax return. If you have not yet registered as a sole trader then you should do so as soon as possible on the HMRC website.
3. Choose whether to submit a paper return or an online return
To complete your tax return yourself you will need to either submit the paper form or the online form. Last year (Feb 2014) more returns than ever before were submitted online with 84.5% being completed on the HMRC website.
If you are not an accountant then completing your tax return yourself can be a challenging and lengthy process. If you make a mistake then you could be left with expensive penalties and an incorrect amount of tax to pay, which can again be a lengthy process to rectify.
We would always recommend that you get an accountant to either complete your return on your behalf or help you with the completion process. If you do not yet have an accountant who can assist you please contact us on 0500 234111 or email firstname.lastname@example.org.
4. Remember the deadlines
Last year 93.4% of all returns were submitted on time, make sure that you remember the deadline dates to ensure that yours is too.
There are two different deadlines one for paper returns and one for online returns; abiding by these deadlines ensures that you will not incur any penalties for late submission.
The deadlines for the tax year 2013/14 are:
- Paper returns: October 31st 2014
- Online returns: January 31st 2015
5. Keep your records organised
Organising your records throughout the year can save a lot of time and stress when the tax return deadline rolls around. For a comprehensive list of all the information that you need to complete your tax return it is a good idea to speak to your accountant. However, below is a basic list of the documents that you may need.
- Total income, either from client invoices or sales receipts.
- Bank statements.
- Copy of your P60 or P45 to provide information on any tax that you may have paid as a permanent employee.
- Income from any property you own.
- All business expenses incurred during the year. The question of what is and is not classed as a legitimate expense claim is often on the minds of many self-employed individuals, for more information on what costs can be claimed as an expense speak to your accountant or visit our guide to self-employed expenses.
- Payments that have already been deducted from your income such as pension contributions.
- Details of any national insurance that has already been paid.
It is a good idea to keep all of your income, expense receipts and other records in a safe place as HMRC can request to view these even after the tax year has ended. Expense receipts and proof of income documents (invoices or sales receipts) should be kept for seven years.
A good tip to ensure your records are organised is to keep a spreadsheet listing all of the work you have invoiced in the tax year along with your expenses. You may find our free bookkeeping spreadsheet and free invoice template helpful.
6. Claim your business costs as business expenses
Business expenses are costs that have been incurred solely and exclusively for your business and should be noted on your return so you can claim tax relief on these costs. Some common examples of costs that could be classed as business expenses are equipment, travel, accommodation, relevant courses and stationery.
You may have some costs, for example your phone bill that are used for both business and personal use. In this case you can expense the proportion of the overall cost that has been used for business. In the instance of your phone bill you can expense the minutes and texts that have been used for work purposes.
7. Avoid the penalties
If you wish to submit a paper return and miss the paper returns deadline then you will need to submit your return online. The deadline of January 31st is the deadline for all online returns and if this deadline is missed you will automatically incur a fine of £100.
If your return is three months overdue you will incur further penalties of £10 for each day that your return continues to be late, up to a maximum value of £900 or 90 days.
Once your return is six months late you will incur a further penalty of either £300 or five per cent of the total tax due, whichever is the greater amount. If your return continues to be late then you will incur further fines depending on your individual circumstances.
8. Pay your tax bill on time
The deadline of January 31st is not just the tax return deadline, but also the deadline for you to pay your tax bill. If you started your business in the financial year 2013/14 this will be your first tax return. The amount you pay will of course depend on the amount you have earned over the year, but as an example let’s say that your tax bill is £3000.
January 31st 2015 £3000 tax bill
£1,500 (to cover half your tax bill for the year 2014/15).
= £4,500 to pay.
July 31st 2015 £1,500 to pay.
January 31st 2016 £4,000 (your tax bill could increase in the second year).
£3000 (already paid).
= £1000 to pay.
If you would like more information on completing your tax return then please get in contact with one of our friendly accountants by calling 0500 234111 or email email@example.com.
For more information click here to view Easy Accountancy's tax returns infographic.
For more information on how we can help you with your self-assessment tax return call 0500 234 111 / 01442 275767, email firstname.lastname@example.org or fill out the form below.
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