Taxes are a pain for everyone, you’re not alone but you have to pay up. So, just to make you realize the importance of dealing with your taxes sooner rather than later, here’s six tax tips to submit a Self Assessment:
1. Tax Deductions
Self-Employed? Great, this means the tax and national insurance you pay is purely based on business profits: income minus expenses.
If you made a loss in your business, don’t worry, this will only reduce the tax you need to pay. As a word of advice, if you make a note of the loss on a Self Assessment Tax Return, you can then put forward this loss and cut it off future profits you make in the business.
2. Mortgage Application
Quick question, are you planning to apply for a self-employed mortgage?
If yes, you need to know most lenders request Tax Return’s from the last 2 or even 3 years to verify your income.
Best to return those taxes if you want that dream house.
3. Legal Requirement
Quite a serious one here, but depending on your personal situation, it may well be a legal requirement for some to submit a Self Assessment Tax Return.
I mention some, to be more clear this applies to the following individuals:
- Company Director
- Employed, and earn more than £100,000 a year
So the listed individuals will have to do submit a Self Assessment Tax Return, unfortunately, even if you do not want to.
Otherwise failure to submit will result in penalties and interest, which no business wants.
You can find out more about who is required to send a Self Assessment Tax Return here.
4. Personal Allowance
Yes, you read that right.
Your allowed to earn up to a certain threshold, without having to pay any tax.
For 2018/19 this is £11,500, otherwise known as your personal allowance.
So for those that are legally required (see point 3) to submit a Tax Return, you may not have to pay any tax if you have not earned above the personal allowance threshold.
5. Marriage Allowance
Another quick question, are your self-employed with unused personal allowance?
Well then, you can claim for the marriage allowance on your personal Tax Return.
This allows a married couple to transfer 10% unused personal allowance from one to the other, saving £200 in tax.
You can read more about the marriage allowance here.
6. Tax Refund
If you are employed and self-employed and your business made a loss, there could be gains waiting for you. This is because you may be able to apply for a tax refund of the tax paid. How? When you submit your Self Assessment Tax Return there is an option to set your self-employment loss against other income.
We have created several posts surrounding the Self-Employed matters for further reading here.
For more information we provide a Business Consultation to fulfill all your business needs including Tax Return’s.
For any assistance contact Companies999, we will be happy to help you!