October 10, 2018 By darya_admin
Prepare Now to Avoid a Penalty
Online tax returns need to be submitted by the end of January 2019. But it makes sense to start the preparation now.
There are more people working as freelancers or setting up their own small businesses in the UK than ever before. While the freedom and flexibility that being your own boss brings has plenty of positives, it also brings additional responsibilities. Dealing with taxation is one of them, and for those that have started up over the past year or so in particular, now is the time to get prepared.
Every individual and small business is unique, so obtaining tax advice from a local accountant is vital. But here, we will run through some of the things you need to know and the steps you must go through to submit your tax return on time and avoid any unpleasant surprises or penalties.
Are you registered?
If you started trading during or prior to the 2017/18 tax year, you will need to submit a tax return for that year. To do that, you need to be registered and the deadline for registration is 05 October 2018. Registration is a relatively straightforward matter and can be done online, but it still takes time to complete, as HMRC will send all the information you need by post. Once you are registered, you will receive a Unique Tax Reference, and an Activation Code, both of which you will need in order to complete your tax return.
Gather your paperwork
This is the part that most businesses dread, and is why it is essential to have good book keeping practices. You will need to provide documents that confirm all revenue and business expenses, as well as information relating to other earnings. This might include any periods of paid employment, interest from savings and investments, rental income and so on. If you have sold a property that is not your primary home during the tax year, report this accurately to ensure you get taxed at the correct rate.
Make sure you include all relevant expenses
Those who work from home, in particular, often forget to claim a whole range of tax-deductible expenses. These include a proportion of your home utility costs, internet and telephone charges, car running costs when you use it for business and so on. It’s another reason why it is vitally important to sit down with your accountant, as they will almost certainly come up with things you have not considered.
Pertinent subscriptions to either paper or online magazines and trade associations can also be claimed, and if you make charitable contributions or are a member of a conservation organisation, museum or zoo, don’t forget to claim gift aid.
Think before you click
If you are sending a paper return, you need to do so by the end of October, but most people will be submitting their tax return online. The deadline for this is the end of January, so while it is a good idea to get it done sooner rather than later, check, double check and treble check before you click submit.
If you are in the slightest doubt, it is always a good idea to speak to your local accountant or tax advisor. For the price of a two hour meeting, they could save you a whole lot of money and worry.