Tuesday, 4 October 2011

Completing Your First Self Assessment?

The time is fast approaching for submitting your 2010-2011 Self Assessment Tax return. If you are completing a paper return, it must reach HMRC by 31 October. If you are completing it online then the deadline is 31 January 2012. Remember there are penalties for failure to do so and they can be quite hefty

If you are filing your first return, here are some handy tips from our Self Assessment seminar last month
  1. Remember to register as Self Employed - If you are filing for work completed in the tax year 6 April 2010-5 April 2011 you should already be registered as self employed. If you started working in this tax year and haven't registered do so as soon as possible, HMRC can fine you for failure to register as self employed. You can find more information about registering on the HMRC website
  2. Remember to register online - If you want to complete your tax return online, you must register to do this on the HMRC website. It can take up to 28 days for your registration to be activated so make sure you do it in plenty of time.
  3. Pre-trading expenditure -  You can claim for any items you may have purchased in preparation for starting your business as if it was purchased on your first day of trading. For example if you bought a sewing machine 6 months before you started trading as a textile artist, you can claim the cost of the machine in your first years tax return. You can only do this if you have not used it for personal/private use.
  4. Training - You can only claim for training costs if you are developing an existing skill (or CPD). You cannot claim for training to allow you to learn a new skill.
  5. Keep proper records - Make sure you keep a record of all business income and all business expenditure. Keep all your reciepts and invoices with your records. Remember you cannot claim for personal expenses. If you use your phone for business and personal use you can only claim for the business cost of using your phone, the same goes for your internet service.
  6. Working from home - If you work from home you can claim ONLY £3 per week for each week you work from home. This covers your electricity, gas, water, rent etc. You may claim more but only if you can demonstrate that working from home costs you more than £3 per week
For further help on completing your tax return, the HMRC website have lots of guides and information available. You can also call their Self Assessment helpline on 0845 900 0444

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