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Getting Self-Assessments Right: A Walkthrough

Posted on by Murray & Lamb

Whether you’re self employed or have staff working for you, all business owners must complete a self-assessment income tax return. Completing this documentation can be confusing and overwhelming, especially if you’re new to the process, so Murray & Lamb have put together this walkthrough to assist you in the procedure.

Register for online services

If you are completing your own self-assessment rather than relying on the professional services of an accountant, you will need to ensure that you are set up for HMRC’s online services so you can fill in the assessment. It can take about a week to be granted access to the online services, so make certain that you have left yourself enough time before the return date.

Do the maths

The first step in completing your self-assessment is to work out your taxable income, from both the business and your personal equities. This needs to be entirely accurate to ensure you pay the correct amount of tax.

Get your records together

Next, collect any records of your personal and professional income, which can either be stored on a computer or in paper form, but which should be stored separately in case HMRC wish to see just your business records. The kinds of records you are required to keep include:

  • Sales records
  • Invoices, banks statements, paying-in slips or any other record of income
  • Invoices for expenditures
  • Records of all cash withdrawals from the business account and notes of the money’s intended purpose, whether for business or personal use
  • Records of all finances paid into the business account from your personal funds
  • Stock inventory

While these are the basic legal records you should keep to ensure that you can provide a fairly accurate recording of your business’s cash flow, it is not a comprehensive list. There are many small details that you should keep track of, such as fuel costs for any vehicles you use for business purposes, that you may be able to claim in your expenditures. If you want to make the most out of your finances and reduce the amount of tax you have to pay, hiring an account is a surefire way; a trained accountant will be able to collate all your data efficiently and provide minutely accurate files for your business.

Be wary of complications with your circumstances

Self-assessments are a simple procedure for smaller businesses, however for larger corporations and complicated circumstances, it becomes a lot trickier to complete the paperwork required. Some examples of complications in circumstances include:

  • Owning or leasing a company car rather than claiming a mileage allowance for use of a personal car
  • If your business has made a loss and needs to reduce tax liability
  • Special situations that have previous arrangements, such as those for farmers, authors, barristers or foster carers
  • Businesses that have spent more than the Annual Investment Allowance on plants and machinery

If you feel that your circumstances might hinder your ability to complete a self-assessment, it is always best to hire the services of a professional rather than make an error on the form yourself. Incorrect tax returns can lead to huge overpayments or underpayments in tax, which can be catastrophic to you on both a personal and a business level.

Send your self-assessment in time

Always make sure you have filed your tax return in time. If you are using the postal method of filing, ensure you leave plenty of time for the post to arrive at HMRC. Paper returns must be with HMRC by 31st October, whilst online forms have until the 31st January.

 

Whether you’re completing your first ever self-assessment or simply require a refresh, Murray and Lamb can provide a tailor-made service to help you get to grips with your tax returns. Our accountants are fully trained and experienced, and will provide friendly and helpful one-on-one guidance. If you’re in need of our assistance, get in contact today and we’ll be happy to discuss our services in more detail.

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