If you happen to be a self-employed business owner or work as a freelancer, the chances are you will already be familiar with self-assessment tax returns. But if you’re not so familiar with them, the process of doing them may seem a little overwhelming, especially due to the fact that the government frequently make changes to policy relating to how they need to be done. Taking this into consideration, we have accumulated some key information you need to know in order to make the self-assessment process as simple as possible.
What kind of tax do small businesses need to be paying?
This is largely dependent on what kind of business you run; there may be a few different types of taxes you’ll need to pay, but here are a few of the most common forms of tax:
- Income tax
- VAT
- Corporation tax
According to HMRC, you are considered self-employed and fully responsible for filing a self-assessment tax return if:
- You are the person who has the final word on how the business is run
- You are accountable for meeting losses as well as making a profit
- You can employ someone on your own terms
- You are the key decision maker in deciding factors such as what work you do, how you do it and the location of your services
- You regularly work for other people
Different rules may apply if you work within an agency, if you are a company director, or if you are a holder of another office. The majority of sole traders will be held accountable for filing their own business tax.
Registering for self-assessment
In order to register for self-assessment, you must go onto the Gov.uk page and register by submitting your personal information. If you run a limited liability partnership a slightly different process will apply and you will go through a separate registration process. Once you have completed your registration, you are able to file your tax return. You can fill out this form online or print a copy and do it by hand. After doing this you’ll need to pay the tax you owe. The deadline for paying your tax is usually the same as the final date for the online self-assessment tax returns.
How do you fill in your self-assessment?
You are going to require all the information regarding your earnings from that tax year, you will also need the details of any expenses you want to deduct from your taxes. It’s crucial that you keep a record of all of your income and expenses. There are countless ways of doing this; there are even accounting apps you can use as well as various other online systems if you would rather keep a digital record.
If you require assistance with your taxes, get in touch with Barron & Co based in Birmingham, our trusted Chartered Certified Accountants will prioritise your needs as well as offer our professional guidance and advice. Give us a call today and see what we can offer you.