Business owners are required, by Law, to complete and file a self-assessment form with the HMRC. This self-assessment is used by the HMRC to collect information required to calculate how much income tax you should pay. Therefore, SME’s need to know how much they owe in taxes.
In this article, we give you 5 tips on keeping ahead of the game
- Get organised
If you want to have a seamless, effortless approach to filing your self-assessment, we would really recommend that you keep good records. That means bank statements, receipts, income, outgoings etc.
- What expenses can you offset against profit
It’s useful to be clear about what allowable expenses you can claim back against the profits you make in the year. If you’ve got evidence of the allowable expenses, then you’ll be able to offset these and ultimately pay less tax.
- Register for self-assessment
If you’ve not registered for self-assessment before, then you’ll need to do this first and register with the HMRC as self-employed, not self-employed, a partner or partnership. Once you’ve submitted your registration form, you’ll need to wait for about 20 days for the application to be processed. You’ll receive a UTR (unique tax payer reference), which you’ll use for filing and paying any income tax liability.
If you’re going to be paying your tax online, you’ll need to register with the Government Gateway online services. They’ll then send you an activation code in order for you to use their online services.
- Know your deadlines
You can file your self-assessment by post or online.
The deadline for posting is 31st October 2021
The deadline for online filing is 31st January 2022
Remember though, that all tax due is payable by midnight on 31st January 2022 for the previous tax year ending 5th April 2021.
- Know your status
It’s important to know what income tax band you’re in before calculating any profit and loss in your business. It’s also important to know what additional income you may have had in the tax year and if any capital gains taxes are due. For instance, if you have a couple of rental properties that you’ve made refurbishments to, the rental income you’ve had or if you’ve sold a property that’s not your prime residence. They’ll be allowances and further tax implications on all of these scenarios.
If you’re unclear about your position, then it’s always worth discussing it with an expert tax accountant. Why? Because tax is their business, and they’ll be able to tell you about some allowances that you may be able to claim that you don’t know about, and also they can work out any capital gains tax you may be liable for after allowances have been applied.
If you’re new to self-assessment or even if you’re a seasoned pro, it’s always a good idea to engage an Accountant. As mentioned earlier, an Accountant will have a thorough knowledge of the many benefits and allowances you may be eligible for, and they’ll be able to advise you and work out any tax due accurately.
Accountants will also be able to advise you on book-keeping, VAT, income tax and running your business in a tax efficient way. There are many benefits to you by engaging with a trusted Accountant – they’ll pay for themselves in the long-run!
We are Makinsons Accountants, your local Accountant Team in the Forest of Dean. We have over 40 years’ experience in all tax matters, and work with small to medium sized companies in and around Gloucestershire. If you’d like to know more information about what we do and how we can help, take a look at our website www.makinsonandco.co.uk or give us a call on 01594 842188 – we’d be happy to help!