5 HELPFUL TIPS FOR DOING YOUR
SELF-ASSESSMENT TAX RETURN ACCURATELY
I know it’s getting very close now but for future years, please remember:
31st January is a deadline…not a target!
You can prepare your tax return from early April each year, for the following January. You’ll have everything you will need by then and there’s no need to wait.
With a month to go, it’s a bit late me telling you this, for the 2021-2022 return. However, once that’s out of the way, there is no reason why we can’t be getting ready for your 2022-2023 return in a few months time too.
Here are my 5 top tips to help you get your self-assessment tax return done way before the deadline and and to avoid any late fees or penalties.
1. Find your household bills and more
It is really important that you have your utility bills and mobile phone bills, etc, and you know exactly what you were paying for the time period the self-assessment covers.
If you work from home or use your mobile phone for business, as well as personal, you can claim a proportion of these bills as expenses. You will also be asked for your mortgage payments or rent payments. Depending on the size of your home and what you use for business and how much of the time, again, you can claim for a proportion of these costs, towards business use.
Make sure you have all of this information to hand before you start. Many people keep these with their ‘personal / household’ information, perhaps even your partner or housemates, deal with some of these bills. So, you may need to speak to them to get the information you need. It’s so much better if you are prepared for this.
2. Keep a record of your mileage
This is one of the hardest things to do retrospectively! So, if you haven’t already, come up with a fool-proof way of recording business travel in your own car and accurately recording your mileage, as you can claim around 45p per mile. There are apps you can use. You can also make a note in an online calendar next to the appointment or meeting you are travelling too.
If you are trying to work out your travels in the tax period from 2021-2022, a diary or calendar can be a good place to start to see where you went. You can work out mileage using something like Google Maps by plotting your journey from your home or workplace, then to your destination and back.
Remember business travel only counts as travel for ‘work purposes’ and does not include a commute or leisure trips that may have been incorporated. It may include visiting clients, networking and buying supplies, but it is not completely ‘black and white’ so do seek advice about different types of trips, if you are unsure.
3. Record ALL outgoing and incomings
This may seem so obvious but remember it is so much better to record absolutely everything that is incoming and outgoing from your business…EVERYTHING!
You may record some things you did not need to (unlikely, but perhaps!) and you may have put down items you hope to be ‘expenses’ and ‘tax deductible’ but may not be…but that’s ok! It’s better to record everything and have a matching record of everything going in and out of your business bank account.
A trusted bookkeeper and accountant can then help you to understand which items of expenditure will count as expenses or not, and can ensure you have everything recorded and labelled accurately, plus where necessary, ensure you have the corresponding ‘evidence’, such as receipts, bills and invoices.
Remember that electronic copies are fine – so take photos of paper receipts to make storing and finding them easier. Create a single digital folder or have one single place they are all recorded.
Many online business bank accounts, as well as accounting software, have functionality to allow you to ‘attach’ photos and files to relevant transactions, making it much easier to get in to the habit of filing items together.
4. Declare all income
You may run a business, but also have additional income.
If you only became self-employed half way through the tax year i.e. in September 2021, then don’t forget other employment income (PAYE income) you received in the tax year time period (i.e April 2021-April 2022) has to be recorded as part of the self-assessment.
You may also receive rent income, a pension or other savings incomes.
Remember that the self-assessment is not just about ‘self-employment income’ or ‘business income’, it’s about all money received.
5. Get your tax return done as early as possible
Sorry to sound like a broken record, but getting your self-assessment tax return done as soon as possible has so many benefits. The 31st January is not only the self-assessment deadline but will also be a payment deadline, so you have to have the money ready too …and if you are not sure what your tax bill is likely to be, this can be a big shock (especially so close following Christmas).
Accountants and bookkeepers are also likely to be very busy, if not fully booked, throughout November, December and January, so it means you won’t get the help you need or you’ll have to pay a high premium.
Benefits to your doing your self-assessment tax return early include:
- More time to budget and save for your tax bills, helping cash flow
- More time to find any missing information
- Plenty of time to ensure you can log-in to HMRC and the Government Gateway
- More time to get support from your accountant or bookkeeper
- More time to put in place software and processes to help you (remember ‘Making Tax Digital’ is coming!)
- All transactions are ‘more recent’ to when you are filing them…it’s amazing how quickly and what you will forget, especially 9 months or more afterwards
- If you are owed money, you get it sooner – yay!
- And finally…you’ll have nothing to worry about over Christmas and a nice relaxing start to the new year…!
SELF-ASSESSMENT TAX RETURN SUPPORT
Have I convinced you that you should get your 2022-2023 self-assessment tax return done asap from April 2023 onwards? If so, that’s amazing to hear!
Make sure that this is the last year of leaving it until the last minute, if you haven’t done your 2021-2022 return yet! Promise?!
Would you like some help with your 2022-2023 self-assessment tax return, so that you can feel super organised? If so, book a consultation call today.
While this blog aims to provide helpful information, it’s important to remember that every business and person is unique. So, before making any decisions, we highly recommend seeking professional advice. We want to ensure that you have all the support you need to make the best choices for your situation!