Self-Employed? Let’s Talk Tax Return & Tips

Being self-employed is a great feeling, nothing beats being your own boss, however like most things it also has it’s set backs and having to take care of your own tax is one of them. If you’re not prepared and organised it can end up getting on top of you or worse, you could forget about it and end up with a hefty fine. I used to dread having to do my tax but now I’ve done it a couple of times I feel better about it. This year I also put a system in place for myself that has really kept me on track with my outgoings and earnings and made the whole process so much easier. This post is a long one, so grab a cuppa and get comfy!

PIN IT!First things first and before anything you have to sign up on the www.gov.co.uk website to be able to file a self assessment tax return. Following that you have to fill in your tax return, previously I have done mine online however last year it decided to not let me into my account so I downloaded the form from the website and posted it which was so much easier. When you download the form you can also choose to download a guide which explains how to fill in your tax return.

From what I remember, doing it online was straight forward and simple and once you’ve submitted it that’s it, they already have it. Doing it by post does take longer but once you have the correct forms you’re good to go. To makes things super easy and straight forward I have designed a table to show you which forms you need for what.

*If you have multiple jobs please keep the following information in mind:

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You need a form for every job that you have:

EXAMPLE
If you have two PAYE (employed) jobs such as Boots and Starbucks and you’re also self-employed with hairdressing in the evenings, you need to fill out ONE self-employed (SHORT) (SA103S) form (for the hairdressing job)and two separate employment (SA102) forms, (one for the Boots job and one for the Starbucks job)

For me, I am only self-employed but I have two different self-employed businesses, so I have to fill out two self-employed (SHORT) (SA103S) forms, one for blogging and one for my online stationery business PaperChicCo.

PIN IT!I mentioned above about a new system that I have in place to ensure that everything runs smoothly and I’m not living under a pile of invoices and receipts. This system is so incredibly useful, it’s straight forward and fool-proof and saves so much time when it comes to completing your tax return.

My big easy secret? I just do my tax at the end of every month. Throughout the month I print off an invoice for every sale or blogger related payment and keep them filed away. On the last day of each month I add up all my sales on both my Etsy Store, main store and then bundle them all together and attach notes onto the front with the amount made for that month. I then put the bundle in a big folder in it’s elected month. I then add up my blogger related payments and store them the same way. I do this for every month, then when it comes to completing my tax form, I just have to add all these up and work out my fees. That doesn’t take a lot of time as Etsy and PayPal have the fee information readily available and I just have to add up each month.

PIN IT!PIN IT!Deadlines (as shown on the government website)

Tax year starting on 6th April 2015 to 5th April 2016

Register for self assessment – 5th October 2016
Paper tax returns – 31st October 2016
Online tax returns – 31st January 2017
Pay the tax you owe – 31st January 2017

Tax year starting on 6th April 2016 to 5th April 2017 – Not yet on the website so these are approximate dates

Register for self assessment – 5th October 2017
Paper tax returns – 31st October 2017
Online tax returns – 31st January 2018
Pay the tax you owe – 31st January 2018

For my tax for the year 2015-2016 I sent mine in May 2016 which gave me plenty of time before the deadline. I didn’t receive a letter regarding what I owed until September so it takes a long time to process it which is why I like to get mine in as soon as possible.

Once you are registered you *should* get a notification by post saying that you are due to fill in the new tax year, if you are no longer self employed you must ring them up and tell them. Last year they tried to fine me £100 for late billing from a couple of years ago (when I wasn’t self-employed) but once I told them I hadn’t actually worked they cancelled the fine.

PIN IT!What to add to expenses

The first time I had to do my own tax I completed mine with an accountant as I wanted to make sure it was done correctly. I was unsure about what I could put on my expenses and he said anything that I had to buy/pay for to do the job. So now for my expenses I include anything that I had to buy or pay out for in order to run my business. For me this is: any packaging, envelopes, boxes, cellotape, labels, cellophane bags, printer ink, printer paper, all of my stock such as notepads, pencils, washi tape etc. Anything that I wouldn’t otherwise purchase if I wasn’t running my business. I also include any listing fees or PayPal fees as these aren’t earnings, they are a must to run the business.

PIN IT!Things to remember

  • Print out all you invoices and keep all of your receipts relating to your business.
  • Personally I find printing the forms off so much easier. If you get locked out of your account and have to phone up to ask for a form to be sent out it can take a while and from my experience it’s just too much hassle. Download your forms from here –  Self Assessment Tax Returns Downloads.
  • Fill out your forms in pencil first incase you make mistakes, even if you printed it out yourself it saves time, ink and paper. Once it’s completed and checked go over it in the correct ink colour, this is usually black ink only.
  • Before you fill it out in ink, always get someone to check it over. The first time I did mine I had an accountant check mine over and now I get Brent to as he’s great with stuff like this.
  • Do your tax at the end of every month, this will help keep you on top of everything and once it comes to filing your tax return you have a lot less work to do.
  • A no brainer but give yourself plenty of time to complete it, you don’t want to be rushing around trying it get it done before the deadline.
  • Always send your completed form by signed for post, either recorded delivery or special delivery and keep your receipt. If anything happens to it along the way, you have proof of postage which could wavier that fine you may receive if it gets lost in the post. You can also track it your end to check that it has been delivered.

I hope this post has helped you get your head around doing your own tax. If you have any other questions feel free to leave them below and I’ll try my best to answer them. However I am not an accountant and this is just from my own personal experience but I’ve never had any problems. Once you’ve done it a couple of times it’s really not that bad and you’ll get the hang of it.

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