There are lots of advantages to being self-employed. You can follow your passion, you can become your own boss and you can set your own hours – but one task you shouldn’t forget about is filing your self-assessment tax return.
Every year self-employed people must submit their tax return to HMRC, and the information is used to work out how much tax you need to pay. If you don’t submit your return you may need to pay a fine, so it is important to get everything submitted on time.
Here are four tips to help you file your self-assessment.
1. 4 Tips For Filing Your Self-Assessment: Get Everything In Order
One of the best tips for filing your self-assessment tax return is to keep your records organised. We suggest using a separate bank account for business payments. This will make it much easier for you to track your earnings and expenses. Keep records for all of your transactions throughout the year, and then you can use these records to ensure your tax return is filled in correctly.
2. Remember You Don’t Have To Do It Alone
You may be tempted to file your own taxes, but this isn’t always the best idea, especially if you don’t know much about accountancy. Normally it is best to hire an accountant as they have the relevant experience. This means you can rest easy knowing that they will file your taxes properly.
Accountants also normally pay for themselves in a sense. This is because they will point out expenses and tax efficiencies that you can take advantage of, which can make your final bill significantly cheaper.
3. Understand What Expenses You Can Claim
It is possible to claim back money for certain expenses. For instance, you may be able to claim money back if you bought a laptop or any office furniture during the previous tax year. Speak to your accountant to find out more about potential expenses you can claim.
4. Have A Plan
Finally you should have a plan for future deadlines. The deadline for paper tax returns is October 31st, and the deadline for online returns is 31st January (so just two weeks away!). Make sure you give yourself enough time in coming years to file your taxes without any stress; we suggest doing it towards the end of the year, so you have at least a month or two to ensure you have enough money to cover the bill. This will make you feel less stressed about paying your bill.
Choosing A Virtual Bookkeeper
If you haven’t found an accountant yet, don’t worry too much. It is still possible to find virtual bookkeepers online who will help you to file your tax return. This tends to be cheaper than hiring an in-house bookkeeper, as you only need to pay them once a year (rather than monthly).