Tax Returns for the Self Employed

If you are self employed, putting together your tax return is a legal requirement for HMRC and a failure to submit it on time will lead to fines and penalties.

Using an accountant to help you put your tax return together, while it may cost you a small amount, should ensure that your return is on time and that all of the information is correctly presented. Your accountant can also assist you with any “time to pay” agreements if you are struggling to pay your tax on time or they can help you dispute any tax decisions that you think are incorrect.

Appointing an accountant to help with your tax return

If you are looking for professional assistance with your dealings with HMRC then you will need to authorise that person so that HMRC know that they are your advisor and are allowed to act on your behalf.

HMRC will then send all correspondence to your advisor with the exception of tax bills and refunds which will still be sent to you.

Be careful who you appoint because HM Revenue and Customs expects high standards that promote tax compliance from anyone who offers to represent or give advice to taxpayers.

Tax Returns – The Basics

To ensure your tax return is correct, you must keep records, which you would have to produce if your tax return is queried by HMRC. These records should include details of all your sales and income, plus a record of anything you have purchased and business expenses you have incurred.

You should keep your records for a minimum of six years. So, for the 2017-18 tax year, this means you must keep records until 31 January 2024.

We have produced a Tax Tips sheet which outlines things you can include.

Important Tax Calendar Dates

You must remember the following deadlines:

  • The deadline to submit tax returns (electronically) is 31st January.
  • The deadline for paper returns is 31st October (HMRC to calculate).
  • The deadline for tax payments for the prior year is 31st January.

Please give yourself and your accountant plenty of time to go through your paperwork. Many people wait until the last few days before the deadline before they start to prepare their return. Your tax accountant will not thank you for this as they may have many more returns to complete as well as yours.

Filing a return early has no downside, you wont have to pay any tax you might owe any earlier, it just takes the pressure off and stops you running the risk of a late filing penalty.

Online Returns

Generally most people now make online returns which is a simple process and one your accountant will be familiar with. Accounting software packages such as Xero and Sage have also simplified the whole process in many ways as they help you keep track of your income and expenses.

However although these tools are a great help, your accountant is likely to have a few questions and points they need to discuss with you prior to making any return, just to ensure that they are filing correctly. Please allow time for these discussions as you may have to do a bit of digging to find certain pieces of information or track down a receipt or supplier invoice.

Our overall message is that self employed tax returns don’t have to be a problem. The better organised you are, the simpler the process will be each year. Acting earlier rather than later will be a significant help to your accountant or tax advisor.

Please feel free to give MCC Accountants a call if you have any questions and we will be happy to help you with your tax return.