How to get Self Assessment wrapped up before Christmas
How do you make sure you don’t tax yourself while filing your Self Assessment? We’ve gathered together tips and facts about filing tax for the self-employed. From the tax questions our accountants are most commonly asked to ridiculous reasons the HMRC receive for late-filing... And how your Amaiz account can help you.
Do you leave Self Assessment to the last minute?
If you’re a small business owner who’s previously left Self Assessment to January - or even the Christmas holidays - you’re not alone. Last year, 16,000 people submitted their tax return online between 24-26 December. More than 2,600 of us preferred crunching numbers to pulling crackers on Christmas day. Of those, 204 submissions were in before 8am - almost time to catch Santa shinning down the chimney. Boxing day was even more popular: 8465 die hards avoided the sales to complete their tax returns on time.
But far from this being some sort of strange, shared masochism, the truth is that for many small businesses, the Christmas and New Year holidays represent one of the few times they can actually sit down, draw breath have a chance to think about sorting out their accounts. Evidently, you’re a hard working bunch. According to HMRC, one in five UK business owners don’t take a break from work on Christmas Day, with 4% going into the office! Even if they do take Christmas Day off, 61% work during the remainder of the festive period, up to the kickoff of the working year on 2nd January.
How to avoid ending up with a Self Assessment Christmas present
Of course, no one relishes doing a tax return. But there are things you can do to make life easier. The next deadline is 31st January 2020 and it’s not too late to beat the Christmas and New Year rush. By submitting your tax return early you’ll avoid last minute stress and be able to enjoy your holidays. In fact, a key part of Amaiz’ business banking was made for it.
How Amaiz makes Self Assessment easy:
With an Amaiz account, you can automatically categorise expenses in our app as you spend. Set categories match those you’ll need to fill out on your Self Assessment form. This means you keep track of your expenses as you go and always have a digital record ready for when you need to complete Self Assessment.
Accounting software integration
When it comes to accounting, Amaiz also allows you to extract and download statements to pass to your accountant, or integrate statements with leading accounting software.
Autofill Jar subaccount
If you want to set aside money for your tax return or any other goal during the year, our Jar account is just for you. You can set up an automated transfer of funds, either as a percentage of incoming transactions or a recurring monthly amount.
More than business banking
Amaiz is just like a business bank account - only with extra features that help you run your business more easily and successfully. You can raise branded invoices from your current account, sending them to clients instantly. You can set up notifications that let you know as soon as those payments have been made. And if you’re stuck you can ask or one of our accountants a general question about bookkeeping, all from the Amaiz app.
Gearing up for Self Assessment
The good news for those looking to avoid the last minute rush is that you can file your Self Assessment online at HMRC months in advance - after 6th April the year before the January deadline if you have the right documents (if you receive PAYE you’ll need to wait to receive your P60 by the end of May). If you have any problems, help is available. HMRC’s Angela MacDonald advises, “If you think you might miss the 31 January deadline, get in touch with us now – the earlier we’re contacted, the more we can help.”
You can find information and support at GOV.UK, from the Self Assessment helpline on 0300 200 3310, and on social media.
Really? Top 5 excuses for late tax returns (actually submitted to HMRC)
The reality of putting off Self Assessment is all-too real, and HMRC publish some of the most ridiculous reasons they receive for a late filing to make that point. Here are five of the best...
- My mother-in-law put a curse on me
- I’m too short to reach the post box
- I was too busy – my first maid walked out, my second maid stole from me, and my third was very slow to learn
- Our junior member of staff registered our client for Self Assessment by mistake because they weren’t wearing their glasses
- My boiler broke and my fingers were too cold to type
Self Assessment FAQ - did you know you can ask an expert accountant?
As part of an Amaiz Advanced account, you have access to a team of accountants, ready to answer your general questions. As you can imagine, Self Assessment and tax returns are among the topics that most frequently come up. Here are some popular questions our accounting team is asked:
I’ve realised I made a mistake on my past tax form. Can I do anything?
If you realise you’ve made a mistake on past returns and you are due a tax refund due to this mistake, you might be able to claim a tax refund for the past four years. Contact HMRC and make a claim for ‘overpayment relief’. Include proof that you’ve paid the tax, confirm you’ve not already reclaimed it, and add a signed declaration saying that the details are correct and complete.
Can I claim tax back on Christmas presents?
Some Christmas gifts are tax deductible, though not ones for the kids, obviously! Corporate gifts might be and you should consider whether it’s ‘helpful advertising’. Items like branded bottle openers, wine coolers, smartphone holders or golf umbrellas are claimable, but you should keep expenditure to around £50 and under.
I’m thinking of having a Christmas do, but I’ve only got one or two staff members. What should I / could I do?
Pub lunch? I can’t help with party planning per se but I can tell you the tax man encourages you to let your hair down (to the tune of around £150 per head.) The general rule is that the cost of entertaining staff is tax deductible, as long as it is not incidental to the entertainment of others. Also, the £150 is per head and not per staff member. To work out the cost per head, divide the total cost by the number of attendees (staff and any other guests). When employees’ spouses and partners attend the event you can budget for £300 per couple. To keep on the right side of HMRC, ensure that the annual event is a staff social event and open to all staff. Also make sure you keep details, such as the number of attendees.
Really? Some naughty claims that never made it
You may not be surprised that HMRC receives some spectacularly unallowable claims, here are some recent ones:
- A tradesman claimed £900 for a 55 inch TV and sound bar to help him ‘price his jobs.’
- A £756 claim was put in for pet dog insurance.
- One optimist put in for “A subscription so I can listen to music while I work.”
Freelancer? Working from home? Don’t forget these!
You’ll want to keep an eye on these claimable expenses if you’re a freelancer.
Gas, electricity, water, council tax
If you carry out your work in your home you can claim a proportion of all your household bills, gas, electricity, water and council tax against your tax bill, but it has to be proportional to your work. If your home office accounts for, say, 10% of your household space, you can claim 10% of the overall cost against the tax.
The interest portion of your mortgage repayments for the portion of the house you use for your business can also be claimed.
You can claim for any business calls. For line rental and broadband connection, a proportion of the cost can be claimed based on business use.
If your computer is only used by the business (and not by other members of your household), you can offset the whole cost.
Only claim for specialist items that are entirely used for work. A new suit probably wouldn’t count (it’s not special enough) but specialist safety boots for certain types of self-employed tradesmen could well be fine.
Last chance list: What to claim, the weird & wonderful, plus what’s not OK!
It’s hard to remember everything you could be able to claim for. Here are some pointers to help make sure you’ve included as much as you can. Remember, the Amaiz app automatically categorises business expenses in line with the below whenever you spend on your card, move money from the app or make an online payment.
|Self Assessment Category||Allowed Expenses||Disallowed Expenses|
|Costs of goods bought for resale or goods used||
|Construction industry – payments to subcontractors||
|Wages, salaries and other staff costs||
|Car, van and travel expenses||
|Rent, rates, power and insurance costs||
|Repairs and maintenance of property and equipment||
|Phone, fax, stationery and other office costs||
|Advertising and business entertainment costs||
|Interest on bank and other loans||
|Bank, credit card and other financial charges||
|Accountancy, legal and other professional fees||
|Other business expenses||
We hope the tips, answers and ‘improbable explanations ’ above help focus your mind, clear Self Assessment from your plate as early as possible, and make your filing easier in years to come.
If you’re yet to complete your Self Assessment tax return, remember:
- Do it sooner rather than later: the deadline is 31 January. Completing it with time to spare is recommended!
- January is the busiest time for HMRC: So you don’t want to be waiting on the phone to double check things. Make sure you leave plenty of time!
And you can open a business account with all the support you need in minutes.