So it’s that time of the year again. 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 try and help you through it, we have answered three common questions we hear about Self Assessment.
Do I need to complete a Self Assessment Tax Return?
If you receive income from any other source other than through your permanent employer through PAYE then you will most likely need to complete a Self Assessment Tax Return.
Common reasons for doing so include:
- Landlord rental
- Being self-employed
- Company Directors
- Minister of religion
If you are unsure as to whether you need to complete a tax return, then speak to a professional about your circumstances. Ignorance does not constitute an excuse and you will receive penalties for not paying tax on relevant income.
How do I register for Self-Assessment?
The easiest and most popular way to file tax returns is through the HMRC’s online service. After registering you will be sent your Unique Taxpayers Reference (UTR). You will also need to enroll 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.
Should you wish to complete the form by post you can do so by following this link.
There are different registration processes for those who are self-employed, those who are not self-employed and those in partnerships so make sure you do your research and fill in the correct forms for your circumstances. Alternatively you can talk to professionals regarding your circumstances and let them navigate the process for you.
What expenses can I claim?
When you are self-employed, a 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:
- 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 stationary 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 to your accountant 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 just round the corner on the 31st Janurary and there is an immediate fine of £100 for not submitting it on time. If you have not had the time to complete it, or just need some assistance then please do not hesitate to give us a call.
Photo credit to Mike Lawrence.