You may be a plumber, decorator, electrician, labourer or any other self-employed manual contractor. Even an artist or a self-employed sports coach. Any of these positions can place a huge physical strain on day-to-day life…
Your time for other things, therefore – such as tax responsibilities – is likely less than you’d prefer. If you are self-employed, you should try out the following solutions. Once implemented, you’ll free up more time to earn.
Set up a separate tax account
Knowing how much money to set aside for your tax bill is important. You may have earned more than you thought, or spent less on expenses, leaving you with a bigger-than-expected tax bill.
To ease the stress, put aside a regular amount into a bank account designed to go towards your tax bill. Online banking is arguably the best way to do this, but you can also arrange a standing order to automate the process.
Knowing the correct amount to set aside is not an exact science, but if you use the standard tax bands as a general guide you will not be too far away.
So if your gross income is below £45,000 then set aside 20%. Any more than this and 40% should be enough. Once you have established your business, you may be able to be more accurate in the amounts you set aside.
Photograph your receipts and statements
Paper filing is going to make your business incredibly sluggish. Thankfully, there’s a host of intelligent tax tools – such as GoSimpleTax – that make it quicker.c
Smartphone integration lets you photograph any important document, whether it’s an invoice or expense receipt. All you need to do then is allocate your income and expenses to the appropriate category and send a summary direct to HMRC.
Track your mileage
The fuel used to get you to and from certain tasks is classified as a tax-deductible business expenditure – as long as you can prove that the mileage was related directly to your work (not commuting to your normal place of work).
In addition to fuel, you can also claim the business proportion of insurance, road fund licence, servicing and repairs, and capital allowances for the purchase of the vehicle.
If keeping all receipts feels like too much of a chore, then you can make a simplified claim based purely on mileage. First, retain a detailed log of your mileage (you need to do this anyway and split it between business and private use).
Once you have your business mileage, you can claim a flat-rate allowance of 45p for the first 10,000 miles, or 25p thereafter.
Use a real-time tax calculator
Understanding your tax bill over the financial year is no simple task. As we’ve mentioned already, there’s plenty of sense in seeking out a digital tax software tool to assist you.
GoSimpleTax, in addition to qualifying expenditure and receipts, shows you what’s liable on your income. This information can then be used to determine how you plan, save and spend your earnings until the Self Assessment deadline hits on 31st January.
It’s all automated; you don’t have to do anything but add the financial records to our software, and GoSimpleTax can submit them directly.
Time is too precious to be wasted on number-crunching – especially when there are easy solutions to help you make the most of the hours in the day. Sign up to GoSimpleTax today for a free 14-day trial.