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How to Prepare for Your Self Assessment Tax Return

The three months running up to January are fondly known amongst most accountants and bookkeepers as ‘tax return season’.

The time when all those receipts, invoices and bank statements need collecting up and collating into your income and expense accounts, ready for submission to HMRC by 31st January 2018.

It’s probably the last thing anyone wants to think about in the run up to Christmas but it’s unfortunately one of those necessary evils required to stay on the right side of the tax man. So how can you prepare for a worry free season?

Here are some really simple tips that will help you to get yourself organised and reduce the pressure, so you can sit back and relax this festive season without worrying about the deadline.

  • First things first – check if you actually need to submit a tax return under self assessment. HMRC provides a useful self assessment tax return tool that asks questions about your income and employment status, providing an instant result. You may not know it, but if you earn under £1,000 in any financial year from self employment, you do not have to complete a return unless you would like to claim a tax rebate or choose to do so for such purposes as mortgage planning.
  • Get your paperwork in order – if after using the HMRC self assessment tool, you find you are required to submit a tax return, start organising your paperwork. Split out your records into income and expenses. Use your bank and credit card statements as a guide to ensuring you have all the information you require to support any claims for expenses and to verify any sources of income.  If you find you are missing any invoices or expense receipts, see if you can request a copy; if this is not possible, make sure you have a good description written down next to the transaction on the bank statement and ensure this was used wholly for business purposes.
  • Get digital – with Making Tax Digital on the horizon, now is as good a time as ever to start recording all your income and expenses into a low cost cloud bookkeeping software
  • Get help – Self Assessment can be a tricky area, especially if you are dealing with vehicles, large purchases and stock assets. Contact a suitably qualified professional such as a Certified Bookkeeper, early on to help you get your tax return right first time. Ensure you allow enough time for them to prepare, request further information and submit by the midnight deadline.  Our self-assessment-tax-return-checklist, will help you prepare the information you and your advisor will need.
  • Make a change – To avoid the many pitfalls associated with undertaking self assessment, set yourself on the right foot through the use of a sole trader app, like 1Tap Receipts, which is specifically designed to make it easy to snap receipts on the go and record keep with ease, extracting all the data you require for your self assessment tax return.

Helping small businesses is our passion and we do all we can to support you to build your businesses success. If you would like to talk to us about your self assessment, how you can better prepare for making tax digital, or get up an running with a 1Tap Receipt subscription, contact us on 01395 320316 or via e-mail on info@exebookkeeping.com

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