For many, who are already all too familiar with submitting a tax return know what it is like when the time comes around to file a tax return. The process can seem incredibly daunting to someone who’s never done it before. It is, however, crucial to do for your business unless you want a visit from the tax man. Here’s a handy break down of how to submit your first tax return.
Collate All Of Your Earnings
Those who have a full-time job do not have to think about tracking their earnings if they just get the same wage each month. For someone running a business though, every day could be different from multiple clients paying you left right and centre. If you have not already, collate all of your earnings into one place so that when it comes to filling out your tax return, you will have everything you need to input into one place.
A good way of doing this is by creating an Excel spreadsheet and note down all the work you have done per month, how much you earnt and when it was paid. If you find keeping track of your income and outgoings a struggle, it might be best to have an accountant. There is plenty of packages to choose from on qdosaccounting.com that can help ease a little pressure off this stage. An accountant may also be able to save you more money as they have the knowledge and know-how in what expenses you can claim and can complete the whole process a lot quicker.
Gather All Of Your Expenses
A great aspect of being self-employed is that you can claim business expenses to help ease the amount of tax you will end up paying back. Of course, those self-employed do not have the luxury of having sick pay or holiday leave, but if you have kept your receipts, you can claim them back. These can be travel receipts, equipment of any sort that you use for your business, your mobile phone contract if you use it as a work phone.
Remember To Include Any Other Work
If you work part-time or full-time, you will need to factor this in also when submitting your tax return. You will need a P60 from your employer so that you or your accountant can input this information correctly.
If you do not have another source of income through full-time or part-time work, you do not need to worry about this step but just in case you have recently gone self-employed, if it is within that tax year, you need to include it.
File Your Return Before The Deadline
Lastly, you do not want to miss the deadline. The return tax deadline remains the same each year, and that is the 31st January. It is staggering how many people leave filing it to the last minute before midnight, and there are those that miss it. If you miss the cutoff point, then expect a £100 fine with more costly penalties the longer you leave it.
It is important to make sure you keep your finances in check, even when the workload gets heavier. However, submitting your tax return on time and with the right expenses claimed could actually save you more money than you expected. Not to mention that surprise cheque in the post when you have overpaid!