Rosie Slosek, who runs One Man Band Accounting, has kindly contributed a guest post this week.
Tax return time is upon us in earnest, and now is the time to get the hassle out of the way before more fun stuff arrives – like parties and eating lots!
It’s easy to think of your self assessment tax return as just being about the expenses. It isn’t as simple as that unfortunately.
There are lots of reasons you may need to file a return: self-employment is only one of them.
- Are you a director of a company?
- Do you rent out a property or a room in your house?
- Has HMRC sent you a return and told you you need to do it?
- Do you have a job as well as freelance?
While doing your bookkeeping takes up most of the time involved, it’s only one aspect, and the others are equally important. Your tax return is about declaring income to HMRC and you need to make sure you get those parts right, as well as having your accounts in order.
Here’s a quick check list of what you need to think about.
- Have you any part time work? Did you finish full time work in the last tax year?
- Get your P60 as you’ll need to give details
- If your self-employment made a loss, you may be able to claim a refund against tax paid in your job
Being a company director
- You need to file a self assessment tax return if you’re a director
- You need to declare any income , capitals items (eg. a computer) and expenses in your business
- If you’re in a partnership, you’ll need to file a partnership return and both partners (not just you) need to file a self assessment tax return
- You’ll need to complete the property pages if you rent out a property to someone else, even if you’re an ‘unintentional’ landlord. You also need to keep records of income and expenses like you would for a business
- You also need to declare if you rent out a room in your house and you may be able to take advantage of the Rent A Room Scheme
Interest, dividends, shares
- Do you have savings that aren’t in an ISA? The interest needs to be declared although it’s usually already been taxed
- If you receive income from dividends they also need to be declared (that’s also those companies you’re a director of)
Benefits, foreign income, trusts, capital gains, pensions
- Income from abroad, trusts and capital gains (eg. selling a house or major asset) need to be included. If you have any of these, it’s a good idea to ask for help, as they’re complicated areas that are easy to fall foul of
- There are also some benefits that need to be reported if you received them in that tax year, eg. Jobseeker’s Allowance
- Some of you may also have student loan repayments which need to be included
See, it’s not too difficult, apart from a few areas (that pesky capital gains again).
It’s not that hard though. It only gets tricky in certain circumstances and you need to know that’s when to ask for help.
For your expenses, you also need to know what’s allowed all of the time, what isn’t allowed all of the time, and what’s allowed some of the time (that’s the tricky bit). Clothing, foreign travel and food are examples of what you need to keep an eye on.
If you’d like help, email me and we can arrange a chat free of charge. I do offer a Notes To Help You Do Your Own Tax Return service and a Checking Your Own Return service if you would like help but don’t want to outsource completely 🙂
Oh yes, and always have a brownie when doing bookkeeping or tax returns. It’s essential as far as I’m concerned.
Rosie Slosek runs One Man Band Accounting, supporting one man bands in the UK with hassle and fear-free accounts mentoring and tax returns, with a home made brownie for every client.
Start your week well and sign up for her free Accountability email every Monday morning at 8am.