As 5 October is the deadline for registering for a self-assessment tax return, business comparison experts at Bionic, explain everything business owners need to know when filing out their tax return and what they’re actually able to claim back from HMRC.
Les Roberts, Business Comparison Expert at Bionic explains what small businesses need to keep in mind, he said, “The type of tax that you pay and the method that you’ll pay it will depend on the type of business that you run.
“There are a lot of different types of tax but these are the main ones to look out for: dividend tax, business rates, national insurance, VAT, and Corporation tax.
“Sole traders must pay Income Tax on any taxable profits they make from their business. This can be done on an annual basis as part of their self-assessment.
“They’ll also have to pay National Insurance Contributions (NICs). Limited Companies must pay 19% corporation tax on all of their profits, and they have to pay in NICs too.
“Remember that you don’t need to register for VAT through HMRC until your business reaches a turnover of £85,000 or higher.”
He added, “Self-employed people can claim back on office equipment, stationary and travel expenses or mileage allowances required for work, but there are other less obvious items to consider too.
- The costs of advertising and marketing your business, which would include costs for hosting and maintaining your company website
- Uniform required in order to carry out your job, including any laundry costs to wash it
- If you work from home, you can claim back phone bills, heating and electricity expenses, and council tax and mortgage interest payments
- Tax relief on pension contributions
- Tax relief for vehicle expenses like petrol, insurance, and repairs
- Food consumed on business trips
“If you have the budget available, I’d advise you hire an accountant to organise and keep a track of your expenses for you as well, or else to use an accounting software.
“If you do decide to try and keep a track of costs by yourself on a spreadsheet, remember to stay on top of these on a weekly basis, and organise expenses by category in order to make them more manageable.”