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:

Expense Categorisation

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.

Mortgage

The interest portion of your mortgage repayments for the portion of the house you use for your business can also be claimed.

Broadband/phone

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.

Computers

If your computer is only used by the business (and not by other members of your household), you can offset the whole cost.

Clothing

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	Goods purchased to resell to customers Payments for services to be resold to be customers Raw materials purchased	Goods taken out of the business for personal usage Goods taken out of the business to family and friends
Construction industry – payments to subcontractors	Payments made to subcontractors in the CIS scheme(before tax has been deducted)	Payments made to subcontractors for non business purposes
Wages, salaries and other staff costs	Salaries and wages for staff Pension contributions for staff Bonuses for staff National insurance for staff Recruitment costs for staff Training for business purposes	Personal pension contributions Your own salary or drawing from the business Private medical insurance premiums Dental treatment costs Childcare costs Non-business training.
Car, van and travel expenses	Mileage for business trips Train,bus, flight tickets for business trips Parking costs for business trips Accomodation/hotel costs for business trips Congestion charges Vehicle insurance Meals for overnight business trips Business lease for cars that are used 100% for business (or as part of a pool, with access available to multiple staff members)	Travel from home to work Parking fines Speeding fines Everyday cost of meals such as lunch, dinner Cost of the daily coffee on the way to work Extra overnight hotel expenses incurred if a business trip was extended a few days for sightseeing. The hotel costs for the extra days spent sightseeing is not allowable
Rent, rates, power and insurance costs	Rent for premises used for business Rates for premises used for business If working from home, you can claim rent, rates,mortgage interest, utilities for the percentage of your house that you use for business or you can claim a flat rate of expenses	Initial cost of purchasing a premises to be used for business
Repairs and maintenance of property and equipment	Day to day repairs and maintenance of business premises	Repairs for parts of the premises that are for personal usage If you work from home, you can’t claim for repairs in your home for any parts that are used by you or your family for personal use
Phone, fax, stationery and other office costs	Broadband, landline, mobile phone( percentage or totals of business usage only) Office stationery used for your business Photocopy/printing costs incurred by your business	Personal usage of mobile or landline phone Premium rate phone calls used to enter competitions
Advertising and business entertainment costs	Online advertising, newspaper/magazine advertising, leaflet advertising	Client entertainment Sponsorship for events Entertaining suppliers Christmas gifts for a one man band business Regular friday night drinks running into thousands of pounds
Interest on bank and other loans	Overdraft interest on business bank accounts Bank loan interest for money borrowed for business purposes	Car loan interest for cars for personal use Personal bank loan interest Repayment of bank loans
Bank, credit card and other financial charges	Bank charges and bank subscription fees Credit card fees for business related transactions	Capital repayments for personal loans Repayments of loans for personal cars
Accountancy, legal and other professional fees	Accountancy fees Solicitors fees Other professional fees such as architects fees	Late submission penalties for self assessment Fines for breach of laws
Other business expenses	Uniforms and protective clothing used by your business	Suits purchased to attend a client meeting Designer clothes to wear to work

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!