So it’s that time of the year again…. And no. I don’t mean Christmas!
The time of the year when some of us panic at the realisation we are not as organised for the imminent Self-Assessment Tax Return deadline as we would like to be. We’re full of mince pies. We’re Christmas shopping. We’re putting our trees up. But self-assessment? It’s achingly dull and it’s not due for AGES…right?
Like Christmas itself self-assessment rolls around much quicker than you’d expect, and it takes time to complete it correctly.
Do I NEED to complete a Self-Assessment Tax Return?
If you receive income from any other source other than through your employer through PAYE then you will most likely need to complete a Self-Assessment Tax Return.
Common reasons for needing to complete a self assessment include:
- Landlord rental income
- Being self-employed
- Being a company Director
- Being a minister of religion
If you are unsure as to whether you need to complete a tax return, then you need to contact an accountant or HMRC (Prepare yourself for some funky hold music) and inform them of your circumstances and get tailored advice. Ignorance is NOT excuse and you will receive penalties for not paying tax on or declaring any relevant income.
How do I register for Self-Assessment?
Like with most things these days most people choose to sort all their self-assessment dealing online. You need to pop along to the HMRC website and follow the instructions, make note of the many many reference numbers you’re provided with along they way paying attention to your Unique Taxpayers Reference (UTR). You will also need to enrol for the Self-Assessment Online service.
You will then be sent an activation code which you will need the first time you log on to your online account. You can replace your activation code should you misplace it but it may take 10 days to reach you in the UK and up to 21 days if you live abroad. Our advice is just don’t misplace it.
There is a different registration processes for those who are self-employed, those who are not self-employed, those in partnerships etc so make sure you do your research and fill in the correct forms for your circumstances. Alternatively, you can talk to us regarding your circumstances and let us navigate the process for you.
What expenses can I claim?
When you are self-employed, a large proportion of your running costs can be deducted from your tax bill such as:
- Internet and phone bills
- Council Tax
- Mortgage interest
Running a limited company allows you to deduct some of your business costs from your tax bill also. Such as:
- Phone and internet bills
- Travel costs
- Advertising and marketing costs
- Business premises costs such as business rates and heating
- Staff costs
- Stock or raw materials if you are intending to sell them
- Clothing and other uniform costs
- Office supplies such as stationery and computers
To get the most from your expenses and therefore reduce your tax bill as much as possible, it is a good idea to talk us about your personal circumstances and what constitutes an expense for you or your business.
We hope you have now completed your tax return, or at the very least have everything prepared ready to fill in your online form. The deadline is the 31st January and there is an immediate fine of £100 for not submitting it on time. Not something you really want to pay after the expense of Christmas!
If you have not had the time to complete it, or don’t fancy jumping through the hoops above when all you really want to do it eat pigs in blankets and watch Die Hard, then please do not hesitate to contact us.
Have a great Christmas!
Love, the Team at Advanced Accountancy.