It might seem a simple case of doing a few sums but keeping on top of your paperwork takes time and accuracy. It’s not just about processing receipts, sales invoices and expenses and entering them into an online, cloud-based software package such as Xero, it is also about knowing how. For sole traders and the self-employed, 31 January is forever circled on the calendar, for that is the deadline to file a Self-Assessment tax return.
Are you prepared?
Self Assessment tax returns are how HM Revenue & Customs (HMRC) collects income tax from those who haven't paid it via PAYE or other means. So, if you receive income from other sources than wages, a pension or interest on savings, or you received untaxed income through renting out a property, or savings and investments, above various limits then you'll need to fill in a Self Assessment tax return. This declares all your income and expenses during the previous tax year, ending 5 April.
Do you need to do a Self Assessment?
Here's a handy checklist to see if you need to complete a Self Assessment Tax Return by 31st January 2018:
- Have you received significant interest on your investments? (£500 for higher rate tax payers or £1,000 for basic rate taxpayers)?
- Have you earned £2,000 or more in dividends?
- Have you received more than £1,000 from rental income?
- Was your savings or investment income more than £10,000 before tax?
- Have you made a profit from selling shares, a second home or another asset and need to pay?
- Are you the director of a Limited or other company?
- Did you or your partner receive over £50,000 during the year and one of you claimed Child Benefit?
- Did you receive income from overseas?
- Did you live abroad and still receive income from the UK?
- Did you receive share dividends as a higher rate taxpayer?
- Was your total income more than £100,000?
- Are you a trustee of a registered pension scheme or other trust, a minister of religion or Lloyds insurance underwriter?
- Did you receive a P800 form from HMRC indicating that you hadn’t paid enough tax last year?
Not sure? We can help.
Mind the fine
Filing your Self Assessment tax return on time is essential. If you pass the 31 January deadline and still haven't filed it, then there are fines of £10 a day for the next 90 days.
If you still haven't filed your return after that, HMRC will hit you with a further £300 fine, or 5% of the tax you owe - whichever is greater. You'll also receive a further £300 fine for every year you're late.
To avoid this financial headache you could hire a bookkeeper to process the information and make sense of your business.
Time to hire a bookkeeper?
Why not leave it to RWB Chartered Accountants to look after your bookkeeping? RWB provides a variety of bookkeeping services, each one custom tailored to our clients’ specific needs. We can take care of everything from Self Assessment to VAT returns, payroll to expenses, right through to customised, monthly management reporting. Contact our expert bookkeeping team on 0115 964 8888 or email email@example.com today.
The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.