Most self-employed individuals dread the thought of having to sit down and fill out a tax form– to the extent many leave it to the week before it’s due in.
Some people finally get their act together just days before the deadline (January 31), while others may even do it on the day it’s due.
Every year many individuals miss the deadline altogether.
According to a Freedom of Information request by the website Moneysaving Expert, a total of 239,000 people didn’t get their taxes in on time for the tax year 2016/17.
Of course, some individuals may have had legitimate excuses, but most probably didn’t.
Don’t let that be you! Certainly, reading the following tips should help make sure it isn’t.
- Get organised.
If you haven’t yet registered for online self-assessment then do so now! That’s because it can take anything from 10 days to a fortnight to get your activation code.
And, the closer it gets to the January 31st deadline, the longer it will take as the tax office begins to get inundated with calls and requests.
2. Get busy.
In order to file your self-employed tax return correctly you will need to gather all your paperwork together.
That means petrol, lunch, stationary receipts for your expenses claim, bank statements and pay slips (if you’re a contractor).
You may also need a previous P60 and notice of any other income you received over the April 2018 to April 2019 tax period.
3. Be honest.
You have to declare all income you’ve received that year, such as money from any jobs, income from property and interest on any bank accounts (even if these are tax-free ISA accounts).
The Personal Allowance for individuals (ie how much you can earn before you start paying tax) is £11,500 for the tax year 2017/18. That’s £500 more than the previous accounting period. It’s due to increase to £12,500 for the following tax year too!
4. Get wise.
Understanding the different tax rates can save you a fortune if you’re on the border between two.
If you fit into the basic tax bracket for instance, then you’ll be taxed at 20 per cent of your income (ie if you earn less than £33.500).
Middle bracket tax payers can earn up to £150,000 while paying 40 per cent tax. The rate for those who earn over this amount is 45 per cent of all income.
5. Get super-smart.
Hire the services of an accountant. That way you won’t suffer ‘tax deadline dread’.
You also know that your accounts will be done correctly and that they will be trying their best to keep your tax bill as low as possible.
And the best bit? You can write-off some of what your your accountant charges against your tax bill too!
You can save yourself the worry of filing your self-assessment tax return in time to HMRC by contacting us on 0203 151 9002, or emailing us via our website at accountantseastlondon.com.
We can deal with your tax filing – and leave you time to get on with what you’re good at- i.e your day job!