Don’t let worry about your self-assessment ruin Christmas

Christmas - in whatever guise it takes this year - is looming large on the horizon. For many sole traders, partnerships, self employed people and anyone who has to submit a self assessment tax return for any other reason, it’s also about now that panic will be starting to gently simmer…

Author: Simon Murrells   |   Date: 9th December 2020

A simmer that will gradually build to a rapid boil as you realise how much work you need to do to get your finances, and paperwork, in order so that you can submit an accurate self assessment return to HMRC before the (hard) deadline of 31st January 2021.

Remember that New Year’s Resolution you made (and broke) about keeping better records this year?

The good news is that it’s not too late. Yet.

Two things you need to know about self assessment

There are two key things you need to know about self assessment, you must submit your return by the deadline. And you must pay any tax due, plus any Payment on Account by the same deadline.

The deadline is midnight on 31st January 2021. This is a ‘hard’ deadline which means that, if you fail to meet the deadline, you will face a penalty from HMRC.

This means that, if you haven’t been keeping your records up to date, it’s probably time to start pulling them together.

HMRC run some useful training webinars which you can access here.

About your record keeping

In this article we shared useful information about completing your self assessment. Take a look to refresh your memory.

In order to complete your self assessment tax return based on self employed income, you must keep the following records. Whilst you do not have to submit these records with your self assessment, you should retain them for 5 years as you may be required to show them to HMRC.

In addition to your income, expenditure, PAYE & VAT (if applicable), grant information and personal income, you will also need to know:

  • How much money you are owed for work that you have completed but not yet been paid for.
  • How much money you owe but have not yet paid – for example invoices that you have received but that have not yet fallen due for payment.
  • How much any stock, or work in progress is worth.
  • Your bank balances for all bank accounts at the end of your financial year.
  • Details of any money you have invested in the business.
  • The amount of money you have taken out of the business as personal income. I.e. how much you have paid yourself or spent on other, non business related items.

Of course, if you use any of the affordable, cloud accounting software packages available this information will be easy for you to find.

However, if you still keep your business finances in a carrier bag, or worse still in the glove box of your vehicle, then you have more work to do before you can start your self assessment tax return.

Give us your ‘carrier bag’ and enjoy yourself this Christmas

With the self assessment tax return deadline coming hot on the heels of Christmas and New Year, many self employed people leave sorting their records out for the quiet spell over the festive period. But inevitably, this leads to a nagging sense that you shouldn’t be enjoying the break like everyone else, and should instead be furiously calculating your tax bill.

At Accountancy Solutions, we vehemently disagree!

You’ve worked hard all year – and let’s face it, this year has been particularly hard going. Which means you deserve a break.

You deserve to spend time with your family and to enjoy getting out in the fresh air without feeling guilty!

You deserve to enjoy watching too much TV and sleeping late in the mornings (unless you have children!) rather than staying up all night to slog through getting your accounts in order.

So why not pass your business accounts carrier bag (real or metaphorical!) to us. You’ll be allocated an experienced member of the team who will whip the paperwork into order, correctly assess your allowable expenses and submit your tax return.

We can even help you put processes in place so that next year you don’t even need to give it a second thought!

To find out how we can help you, email hello@accountancysolutions.co

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