ImagesMagUK_April_2021

BUSINESS DEVELOPMENT www.images-magazine.com 32 images APRIL 2021 This tax year I’d like to make sure I’m really on top of everything – do you have any tips on how I can best manage my tax? M anaging your tax affairs is probably your least favourite part of working for yourself. It is so easy to get it wrong, to not claim for the things you should, or find yourself in a last-minute panic at the end of January, desperately trying to get an accountant to help you before the deadline. If you want this year to be different, below are some tips to help you. 1. Get your accounts online using one of the bookkeeping apps Apps make it far easier to manage your tax affairs, particularly if linked to your bank. Most are very simple to use; if you can use an iPhone, you can use an accounting app. Some will even let you issue invoices from them. Once online you can hand your accounts over to a specialist or accountant with ease by just giving them access to the app. Corporation tax and VAT are then straightforward – no more back and forwards. 2. Don’t let those receipts pile up All expenses can now, easily, be stored instantly digitally through one of the many apps. Some, such as Amaiz, will even categorise the receipt for you and log it straight into your bookkeeping. It will save you hours. Contrary to the advice from some accountants, HMRC actually prefers digital copies of receipts, so you can throw the paper ones away. Get into the habit now and January 2022 will be far more straightforward. 3. Are you claiming for everything you can in expenses? Most people aren’t. Sit down over the course of a week and add all your work expenses to a spreadsheet and categorise them. The sort of permissible expenses we usually see overlooked are travel, lunches and work clothes. However, the biggest one recently is the cost of PPE and working from home. Have you had to adapt your business due to the pandemic in any way, or are you working from home? If you’re working from home you will be using more lighting and heating. You can claim a contribution to your utilities and even your rent, plus items such as a desk and chair. These expenses can make a huge difference to your tax bill as they’re added to your personal allowance. On average, our clients receive a £3,000 refund because they’ve overlooked what are perfectly legitimate expenses. 4. Did you make a loss last year? HMRC allows you to carry forward a loss and set it against profits in a future year, so if you bounce back well after lockdown, remember to offset your losses last year against your profits this year. If your business continues to struggle these losses can be carried forward until they’re used up. You will be asked for additional information in your tax return. 5. Are you due a refund? HMRC typically anticipates the tax you owe by looking at your previous year’s income and averaging that out over the year. If you have a sudden drop in income that means you will overpay in tax and will be eligible for a refund. To claim the rebate yourself go onto www.gov.uk/claim-tax-refund and the site will take you through a series of questions. HMRC does have a helpline, but they can take a long time to answer (around an hour is typical) so make sure you’re ready with all your expenses and income in a spreadsheet in front of you. 6. Professional help If you’re struggling, you should get professional help. If you get it wrong, then HMRC could fine you (or worse) or you could fail to get the money you’re owed. An accountant will charge you a flat fee. Specialist services, like Tommys Tax, will do all the calculations for you at no cost and only charge you when you get the money into your account (when you use a specialist that is usually really quick – hours or days instead of weeks). The specialist will talk you through it and we usually identify expenses that you’ve overlooked. Expert advice on the business of running a garment decoration company Q&A Tommy McNally is a specialist on tax for the self-employed and small business owners, and founder of the free Tommys Tax App, which enables users to claim a tax refund in “one user- friendly place”. www.tommystax.com If you can use an iPhone, you can use an accounting app