Here are ten tips for making self-assessment as simple as possible.
1. Get a Business Bank Account
It makes life much simpler – instead of having to trawl through your personal account looking for business payments, they’re all in one place.
2. Record Expenses as You Go Along
If you’ve got a business bank account, try to pay all regular business expenses from it, so it’s easy to enter each month’s figures into your accounts as you go along.
3. Out and About? Your Phone Can Be Your Bookkeeper
Set up an online folder for each year’s receipts, snap your receipts as you go along and store them in the cloud.
4.Make Sure You Only Claim What You Should
Check here for information on what you can and can’t claim: https://www.gov.uk/expenses-if-youre-self-employed.
5. Keep It Simple with a Profit and Loss
You only need a simple profit and loss statement if you’re self-employed. This will show money received by the business and expenses paid out. The balance is your profit, which you’ll pay tax on.
6. Keep That Expenses Spreadsheet Simple
If you keep your business accounts in a spreadsheet or on paper, you don’t need to analyse your expenses in detail. Just note costs down as business expenses in general.
7. SA103S Only Requires Two Boxes
If you’re not VAT registered and you use the shorter self-assessment form for your business income, there are only two boxes to fill in – income and expenses. The online system will calculate your profit.
8. Put the Tax Aside
You can make a rough estimate of the tax you need to pay or use the HMRC “ready reckoner” tool. But whatever you do, put the tax aside so that it’s there when you need to pay.
9. If This Sounds Daunting, Get an Accountant
For self-employed people, there are Cheltenham accountants such as https://www.randall-payne.co.uk/ who are able to save you time and worry by doing the whole thing for you at an affordable cost. And you have the security of knowing your accounts are correct and you’ve only claimed for allowed expenses.
10. Don’t Be Tempted by Tax-Saving Schemes
Avoid scam merchants offering “too good to be true” tax-saving schemes. They’re just that – too good to be true, as many people find out to their cost later on.