If you’re one of the 4.24 million self-employed workers in the UK then the clock is ticking for you to file your Self Assessment tax return for the 2022 to 2023 tax year.
Whether you’re newly self-employed or you have multiple sources of income, it is essential you check if you need to complete a Self Assessment tax return. If you do not file a return or not paying the correct amount of tax owed, this could lead to financial penalties.
Here are seven tips to get your Self Assessment tax return right:
1. Be meticulous about keeping records
Keeping good habits early on about expenditure and receipts is a failsafe way of ensuring you don’t breach any tax rules.
You can use accounting software to automate your record keeping to make life much easier, especially when it’s time to complete your Self Assessment tax return.
2. Monthly check-ins
Being disciplined about tallying your monthly incomes and expenditures with your bank statements will minimise the risk of errors.
In other words, make sure your bank balance as per your records tallies with the actual bank statement. This will come in handy when spotting and rectifying errors that can lead to fines from the HMRC.
3. Don’t miss the deadline
You may think this tip is obvious but one of the biggest mistakes self-employed workers make is not sticking to deadlines to pay tax.
Hire an experienced accountant if you need someone who will guide you through the Self Assessment tax return process.
4. Consequences of being late
For a business owner, every penny matters. Pay your Self Assessment tax bill on time because you’re also liable for interest on outstanding sums. Any late submissions are likely to result in an immediate £100 penalty and this will increase after three months.
5. Claim those expenses
When it comes to expenses you need to know what you can or can’t claim. You must check expenses you can claim for when you’re self-employed before you start filling in the form, especially if it’s your first time.
6. Avoid mistakes
Making mistakes while filing your Self Assessment tax return can be costly. As a business owner who’s made errors, you could end up wasting a lot of time and money rectifying small mistakes.
If you make a mistake on your return, you normally get 12 months from 31 January after the end of the tax year to correct it (called “an amendment”).
7. Hire an expert
Tax returns can be a complicated process for some self-employed people. There’s no shame in asking for help for filing tax returns so hire a professional accountant to go through your books,
Use Sage Accounting for a stress-free Self Assessment.