Personal Tax returns for the self-employed - SATR’s 5 ways to take the pain out of your tax return
Personal tax returns for the year to 5th April 2019 are due by 31st January 2020. “That’s ages away”, you’re thinking but it’s really not. We’ll soon be into Summer holidays – August Bank holiday will be here before you know it and then the Autumn term starts, the nights draw in and – oh look - it’s Christmas and you still haven’t done your tax return!
So, do yourself and your accountant (if you have one) a huge favour and get on top of it now. Here are some tips to put you in control :
Go to the stationery store and buy yourself a lever arch file, a pack of file dividers, a hole punch, a permanent maker pen and at least twelve punched plastic pockets. All legitimate business expenses, so keep the receipt for later.
Get set up
Label up the dividers as follows : Bank statements, Sales invoices , Expenses and Receipts, Employment records, Pension records, HMRC correspondence, Sale/purchase of capital assets, Other correspondence and Bits and Bobs. This is not an exhaustive list – your file may need different sections, but you get the idea.
Put twelve of the plastic pockets into the section called Expenses and Receipts. Use your new marker pen to label them April, May, June etc. Now sort through that scruffy pile of paper which has been building up in a drawer somewhere and put all your supplier invoices and petty cash receipts into date order. File them into the relevant pocket.
Put your bank statements for the year in the relevant section of the file. In addition, if you have internet banking, log into your account and download a .csv or Excel file of your transactions for the year. Use the dates 1st April 2018 to 31st March 2019 to keep life simple. If you prepare your own tax return, you can sort and total up receipts and payments to help figure out income and expenses for the year or email it to your accountant who will be deeply grateful for it when they come to do this for you.
Complete the picture
Put on file copies of your sales invoices or a list of the invoices you have issued in the year along with details of any outstanding at the year end. If you are on any payrolls or in receipt of a pension, file any P60’s and P11D’s which you should have received by 6th July, in the Employment Records section. If you have made personal pension contributions in the year, file that paperwork in the Pension Records section. Put any correspondence from HMRC on the file and any other correspondence which might be relevant. If you’re not sure, put it in the file and let your accountant decide.
So, job done – you’re now organised and can either prepare your own tax return or send the file to your accountant who will be delighted to receive it in July rather than January. And finally – go back to the stationery store and do it all again for this current year so that you keep on top of things month by month instead of leaving it all to the last minute and having to sort through a year’s worth of bits of paper again next year. Best of luck!
If you’re still feeling a bit overwhelmed and would like some more detailed advice on preparing your Tax return, please call me on 0794 167 4936 or email me at email@example.com.