How to prepare for Self Assessment

How to prepare for Self Assessment

With the Self Assessment tax return deadline coming soon in January, we share what you need to do to prepare for submitting your return.

When is your Self Assessment tax return due?

The deadline for online submission is midnight 31 January 2021. The deadline for paper submission has already passed. So, you still have time to prepare for your online submission. Here’s how!

Check your earnings

Knowing what you earned during the last tax year is an important starting point, as you may not need to submit a Self Assessment tax return.

If you earned under £1,000 in the last tax year you don’t need to submit a tax return, but you do need to let HMRC know if you’re already registered as a sole trader.

Any amount you earned above this does need to be reported, even if it falls within your personal allowance.

Contact your accountant (if you have one!)

If you’re working with an accountant to submit your Self Assessment tax return, the next step is to contact them. They will let you know what information they need from you to complete the submission.

Self Assessment season is a busy time for accountants, so make sure you send them what they need as soon as possible. That way, you can have peace of mind that your tax return is off your plate, and you can go back to running your business.

If you don’t have an accountant but need some help with your Self Assessment tax return, you can find a trusted Bokio Partner accountant here.

Make sure you have all your documents

Whether you’re doing your Self Assessment tax return yourself or with an accountant, you’ll need to make sure you have all your documents ready. This is usually invoices and receipts for any expenses.

If you’re using accounting software to keep records, make sure you’ve uploaded all the receipts and documents you need to have the right information to fill in your return, including your income and expenses.

You don’t need to upload documents to your Self Assessment tax return, but it’s really important to keep records in case HMRC needs to check anything with you. You can keep records digitally or in paper form, but you need to have them for up to 6 years depending on your business type. Here’s what records you need to keep:

  • Sales and income, including invoices
  • Business expenses, including receipts for purchases
  • Your personal income
  • VAT records (if you’re registered)
  • PAYE records (if you have employees)

Know your turnover and expenses

When you fill in your Self Assessment tax return you’ll need to know your turnover and expenses.

The easiest way to do this is using a Profit and Loss report in your accounting software, which is automatically generated by your bookkeeping. You can just use the figures from this report to fill in your tax return.

If you aren’t using software, you’ll need to calculate your total turnover and allowable expenses for the tax year (06/04-05/04) using your accounting records.

Check your allowable expenses

As a sole trader, you can claim allowable expenses on your tax return. This reduces the amount of income you pay tax on by deducting expenses from your turnover.

You can only claim expenses that are directly related to your business. There are some expenses which you can split between personal and business too.

We have a complete guide to allowable expenses which tells you everything you need to know to make sure you’re in the know.

Use an accounting software

If you’re not already using software, consider making the switch. When you upload information continuously over the year you’ll already have everything you need to make your submission quick and stress free.

By recording transactions, uploading receipts, and managing invoicing and expenses in the same place you won’t have to search for information when it’s time to submit your Self Assessment tax return.

Bokio accounting software has lots of helpful features to help you prepare for your Self Assessment tax return, like bank feeds to make sure you don’t miss transactions, and reports to give you an overview of your finances. We also have integrated invoicing and much more to help you run your business.

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