WHAT?
Self-assessment is the method by which HMRC collects tax from those of us who are self-employed.
SOLE TRADER V SELF EMPLOYED
A sole trader is a self-employed person who owns and runs their own business as an individual. A sole trader business doesn't have any legal identity separate from its owner. He/she is entitled to keep all the profits and suffer all the losses. Being a sole trader refers to the structure of your business whereas self-employed refers to how you pay your taxes.
You must complete a self-assessment if you are self-employed in any of the following capacities
- Sole trader
- Partner in LLP
- Partner in a partnership
- Traded at any point during the tax year ( runs from 6th April 2019 to 5th April 2020)
- Registered Director of your own limited company
- Registered as a director for a company that traded at any point during the tax year
WHEN?
WHAT INFORMATION DO I NEED TO DO MY SELF-ASSESSMENT?
All your business income. Business income is made up of the sales that you have invoiced, as well as any sales that you have completed the work for during the tax year but have not as yet invoiced. You should keep a record of every invoice that makes up the total of your income.
All your business-related expenses
You can only claim expenses if HMRC deems them allowable. Please visit the HMRC website to determine what is allowable and what is not. Generally speaking, all costs directly related to the activity of your business are deemed to be business-related expenses. However, it is important that you check eligibility before placing them on your claim.
You will need to keep all of the receipts that you are wishing to claim. HMRC is happy for you just to keep digital copies rather than just hard copies. Please note that when you are digitalising your receipts to scan both the back and front of the receipt of information is shown on both sides. If you only receive an email receipt this is also acceptable.
Here is a checklist of the main expenses that businesses claim for
Working from Home costs
HMRC offer a simple way to calculate your working from home expenses using a flat rate calculation rather than trying to work out the rooms in your home that you work in, for how long and then dividing that percentage sq footage into your utility bills
Registration and submission of your self-assessment tax return can be done all online.
If you need assistance with your self-assessment or know someone else who does, you can get in touch in the following ways
Email: janet.jensen@ekstraas.co.uk Tel: 07458 302 512
Website: www.ekstraas.co.uk