File Your Self-Assessment Tax Return by 31st January To Avoid Late Filing Penalties

Self-assessment is the method employed by HMRC to gather Income Tax and National Insurance contributions from individuals who are self-employed, as well as those who receive unreported taxable income from various sources. This includes individuals holding positions such as limited company directors, shareholders, and members of limited liability partnerships (LLPs). Through the self-assessment process, taxpayers are required to report their income, gains, and other relevant financial information, enabling HMRC to calculate the appropriate amount of tax and National Insurance owed.

For the year 2022/23 the tax return filing deadline is midnight on 31st January 2024. To save yourself from tax return penalty, any National Insurance and income tax due for the year 2022/2223, must be paid by 31st January 2024. 

You also have the option to file a tax return by post in case you do not know how to file tax returns online. Filing a self-assessment tax return online is a much easier and quicker option. 

How to Register for Self-Assessment?

You must be registered for Self Assessment tax return when you file your first tax return. If you did not sent tax return online last year, you need to register (in case if you have submitted tax return through post) HMRC will send you a letter to your registered address containing 10 digit Unique Taxpayer Reference (UTR) number with in 10 working days or 21 days. 

You must then:

• make an online account
• use your UTR to sign up for the Self Assessment online service
  
  

HMRC will send you an activation code to your registered address with in 7 working days or 21 days if it is outside UK. Use this code with your UTR for sign in to your account and filing your tax return online. 

How To File Self Assessment Tax Return?

From below two ways you can use any one to file Self Assessment tax return (form SA100) with HMRC:

• Complete & submit form SA100 online
• Download & complete form SA100 by hand and submit by post
  

The fastest and easiest way to send a Self Assessment tax return online. You also get extra three months to file an online return and it is much easier way for making amendments. 

Things need to be taken care of when filing a self-employed tax return

 First and foremost, a business owner should know whether to register as self-employed or as a limited company. Both registrations are vastly different. Let's see how:

Register As Self-Employed	Register As A Limited Company
Disclosing requirement is less as you are only required to complete a Self Assessment tax return once a year. You can hire Self-assessment accountants in London for this	Disclosing requirements are much more
You are entitled to all the profits you	You are not entitled to all the profits You
You are a business and not the officer of the company.	In a Limited Company, you are the officer of the company
You have no restrictions on withdrawing funds from your bank account.	You being a director of the company would be withdrawing as a salary, bonuses, dividend or a loan account.

Pre-Requisition For Setting Up As A Sole Trader Or A Self Employed

Anyone can set up as a sole trader or self-employed but in a few business types, you require to obtain a permit or a license from your local authority. These businesses include a Taxi Driving license, Babysitting, and Selling anything on the street.  At the time of setting up as a Sole Trader one has to follow some legal requirements.

If you will be running your business from home, you need to pay business rates in the area that you are using for your business purpose. For Example – If you are selling bakery items in your store room area or in your garage, you need to pay business charges for that store room or garage.

If you are an IT person and working from your laptop sitting in your bedroom or sitting area, it is unlikely to pay business rates because it is also being used for a domestic purpose – but if the same thing is done making a separate room such as an office, then you will have to definitely pay business rates as this room is only used for your business purpose. You may also need planning permission to work from home, depending on what type of business are you in. Planning permission is required because if your business area is getting a side extension and the neighbours residing there have an issue then at that point in time it becomes necessary for you to take planning permission. Planning permission and the rates for it are different according to your type of business to know about it you need to contact your local authority as every area is different.

Who Registers as Self-Employed?

If you register as self-employed you are not required a lot of administration as compared to a limited company. However, if you are registering as self-employed then you must register by 5th October of the second tax year of your business from when you have started your self-employment or when you have started trading. You may receive a penalty of £100 if you do not register on time and the penalty will increase after three months.

Who Can Be Classified as Self-employed?

Contractors – They work on a contract basis, for example, Plumbers, Builders, Electricians (CIS Tax), Locum GPs and etc.

Freelancers – They work on client-based requirements so it can be on a weekly, monthly or quarterly basis. Once the work is completed you get some other client to work with.

You will receive a Tax-Free code from the “gov.uk”, which for this Tax Year of 2022/2023 will be 1257L. If your income is more than £100,000 then your personal allowance will be less.

Registering for Self-Assessment Tax Returns for Self-employed

Self-Assessment Tax Return is submitted to HMRC by a Self-Employed person or Sole Trader. For this, you need to fill up a tax return form (either online or hard copy). Note the deadlines for both online and offline are different.

If you belong to the threshold of 85,000, you need to inform HMRC about your sales and expenses in a simple three-line format. There can be a possibility to fill up the full self-assessment tax return if you fall under a certain category that needs full disclosure of expenses. For a new self-employed there are many more things that you need to know. You can get the information on the HMRC website

HMRC will send you the self-assessment tax return in the month of April every year but anyhow if it doesn’t reach you by the end of April, it is your responsibility to inform about this to HMRC or else you will be liable to pay the required penalties. For those who are doing it for the very first time, you will need to fill in a self-assessment registration form first. For this National Insurance Number is mandatory.

Self-employed Registration

The one who is a sole trader /self-employed they have to fill up a CWF1 form to inform HMRC about the type of your business.

The one who is not self-employed has to complete filling out an SA1 form. Once this is done, HMRC will set up Tax Records for you and HMRC will send you a UTR number that needs to be preserved lifelong.

For all this, you can hire an accountant for self-employed in London who will register on your behalf and will get you the UTR number.

Self-employed Self-Assessment Payment Deadlines

You must pay the total amount you owe to HMRC by 31st January. The deadline for payment is the same for both filed online or offline (on paper). You will have to pay both or any one of the following:

• The balancing payment

• The first two ‘payments on account’

 

You will receive a statement after filing from HMRC stating the amount due for your return. If you do not receive this before your due date of payment, then you have to do it yourself or this can be done by the accountant you have hired.

Self-employed Filing

If you are a Sole Trader, it is mandatory for you to file tax returns annually. If you are a VAT Registered business as self-employed, then your VAT returns should be completed every quarterly or Annually.

This means you will have to not only stay compliant but also be organized every time to help you make the process quick and efficient. When the new Digital Tax Scheme comes into place in the near future all Self Employed Individuals will have to file tax return quarterly in the near future as the new digital tax scheme is going to be the future

While filing a self-employed tax return you need to be accurate in the legal formalities. If you miss any small thing, you will be liable for penalties. So to be on the safer side you must take the help of an accountant for self-employed in London who will register if this is your first time, will file your tax quarterly and will not get you the penalties.

Understand self-assessment tax calculation and Payment

 

Handling your own firm and being your own boss is a great way to go down. But one job you might require to handle is filling a Self Assessment tax return. Self Assessment is a procedure that HMRC utilises to collect data required to calculate how much revenue tax you should pay. And if you’re operating a small business instead of earning a traditional salary, you must work out how much you owe.

In this article, we describe best advices to assist you File your Self Assessment tax return. Filing a self-assessment tax return is less complex; in reality it is not bad at all.

Register With HMRC
If you are self-employed, you have to inform HMRC so HMRC will send you your Unique Taxpayer Reference (UTR) and you can set up your account online. Make sure you know your NI number also.

For the first year of your business setup, you can wait till the year ends in April and file your first tax return online or through your tax return accountant by midnight of 31 January the following year. It is advisable not to wait don’t wait until the last minute!

Understand tax Slabs
Most people are entitled to gain a specific portion of the money and not pay any tax on it. It is called a personal allowance and for 2020/21 it’s £12,500. After that, you pay 20% tax until you hit £37,500, and after that 40% tax on anything until you earn £150,000 These rates change every year and vary.

Get help:
Tax Accountants generally charge £100 to £300 for calculating and filing your self-assessment tax return, but you will still have to record your income and expenses and pay the actual HMRC bill yourself.

Modern Accountancy Standards to Improve your Finance and Accounting Services

Modern-day accountancy work has shifted from being on pen and paper and has become more advanced. Accountancy services are crucial to your business and for it to be organised financially. Here’s why you should optimise your small and medium-size business with bookkeeping and accounting services.

Now that you have realised that bookkeeping and accounting are important factors to your small and medium-size business, let’s first discuss the differences between the two. To put it simply, Bookkeeping service is the practice of recording and keeping that maintains and keeps a record of financial transactions. SME accounting services in UK analyses, interprets and organises the records. When both are consolidated, they create the perfect harmony to ensure that your business has a well-maintained financial record that can be used to track different business transactions.

Modern bookkeeping services for your business –

Accounting might have looked totally different a couple of years prior. But currently, many factors have caused bookkeeping to evolve for the better. Having some of the tips that we are about to share, could help your small and medium-sized enterprises thrive financially and you will be able to keep track of your business transactions and in other areas of your business’s financial situation.

•   Be dedicated– Being dedicated to your business’s bookkeeping is crucial. Particularly assuming your business is beginning to get, the need for proper bookkeeping is crucial. Missing out on one number or even a point could cause you trouble in the long run.
•   Be vigilant– Pay attention to all the figures and matters that are required to make your business thrive and progress. This is why you should leave your bookkeeping needs to a professional that can vigilantly carry them out.
•   Separate your finances– Separating your personal finances from your business finances is crucial to ensuring that your bookkeeping can be done well. If not done, this could cause your business trouble in maintaining your financial records.

Modern SME accounting services for your business -

Different Accounting strategies have been carried out because of the ascent of innovation and different variables in the advanced monetary world. These are a few hints on how you may employ SME accounting offerings in London to make sure your enterprise is capable of progress.

•   Have the expertise– Find an accounting firm that is able to accommodate your SME accounting needs. You could reevaluate for administration to guarantee that you can utilize their abilities to help your business and guarantee things are done well.
•   Use of technology– Technology in the financial world has become more prevalent. The use of the appropriate software can help you handle and interpret your business figures to ensure that you are able to digest the results easily.
•   Hire someone with experience– Someone with experience would have had their fair share of failures and learning curves at other places which have caused them to be able to deliver the results that you need. Hiring someone with experience will ensure that they can give you the best results without mistakes.

Conclusion –

Optimising your Small and medium-sized enterprises with bookkeeping services and accounting services are crucial to ensuring your business’s progress. They also allow you to focus on other areas of your business without having to worry too much about your accountancy matters.

If you require any assistance on accounting services, feel free to contact us at 020-8239-4999. we offer a complimentary consultation for us to better understand your business requirements.

 

Importance of Accountability for Accountants

As an accountant, you are used to providing products, like completed tax returns or financial projects for small businesses. Though consulting -- and advisory approaches -- will be a lot more around the debates you maintain with customers. Responsibility is an important and often missed part of being prosperous in this arena.

As you change your firm from compliance focusing service to customer advisory services (CAS), your direction will move from delivering your customers with “output” to “intangibles.” And something engaging will occur: 

You’ll start to surprise if you are doing enough.

You will ’ll surprise why a customer would pay you additionally than they ever hold earlier “just to talk.”

And thereby wondering, you will begin to form latest outcome which will not only take time and power to preserve, but which your client will not look at. Or worse, they will look at them, get dazed, and then do nothing.

Before you understand it, you are right back to executing too much work for insufficient money. And to add scorn to harm, your customers either are not attending to you or they are providing credit for their progress to person or something additional than you.

And this is all due to you have miscalculated the strength of responsibility.

The Leverage of Accountability

Accountants & bookkeepers hold extended secured our value to the things we deliver to clients. We have devoted time, funds, and energy trimming these things, first in the form of imprinted binders, then in the form of digital dashboards. Lately, we’ve begun to set value on how fast we deliver the things.

HMRC Tax Investigation - What You Need To Know?

 HMRC Investigations team start Code Of Practice 9 investigations if they doubt a “serious” tax fraud has been executed by planned activity. COP9 is a civil investigative process used by HMRC where severe tax fraud is doubted whereas they don't want to carry out a criminal investigation. Taxpayers are allowed to make a full discourse beneath a contract named a (CDF) Contractual Disclosure Facility about exemption from illegal prosecution. 

HMRC strongly suggest that you seek to appoint independent proficient advice. Our team of Tax Investigation experts assist you on all matters covered by the COP9. It is crucial that once under revenue investigation Specialist Tax Attorneys are instructed as COP9s can be badly handled by non-specialist accountants.  Our team have wide-ranging knowledge in helping those facing a COP9 investigation whilst assisting to navigate the tough time limitations and strict rules. 

We can assist you by:

• Reviewing the whole matter; 
• Providing specialist guidance throughout the whole investigative process;
• Depicting you in correspondence, consultations and sessions with HMRC;
• Arranging the range of the Disclosure Report; 
• Collating and scheduling all documentation instructed by HMRC, including Outline Disclosure, Full Disclosure and the Disclosure Report; and
• Examining disputed tax assessments and penalties.
  
  

Just call us at 020-8239-4999 for further assistance.

What is a Code of Practice 9 (COP9) investigation?

HMRC will start a COP9 investigation if they have proof that you have or may have executed serious tax fraud. There are 2 options for a taxpayer under a COP9 investigation:

1. Accept the Contractual Disclosure Facility (CDF): in return for immunity from criminal prosecution, a taxpayer is allowed to make an outline disclosure to HMRC setting out all the areas where tax fraud has been carried about in planned manners at the outset. Penalties and interest apply. This offer expires after 60 days. The CDF can also be used when you expect to reveal a tax fraud willingly.
   
   
2. Reject the Contractual Disclosure Facility (CDF): if you do not think that you have carried a loss of tax via intentional manners you can replace a CDF Rejection Letter within 60 days. If HMRC carries on with the investigation and discovers that you have executed fraud, you will receive more increased fines and you could receive a jail verdict.
   
   

NB: the Denial path for taxpayers has been revoked: formerly, a taxpayer could refuse fraud, though would cooperate with HMRC during the investigation. Discarding the Rejection choice conveys if you are subject to a COP9, you have 2 options: accept the CDF or reject the CDF. 

What is serious tax fraud?

In the context of COP9 investigations, fraud is described as “unethical conduct that directed to, or was intended to lead to, the loss of tax”. An individual commits an offence if they are deliberately involved in the fraudulent evasion of tax or duty, by themselves or by another person. 

This includes:

    withholding or hiding relevant truths;

    dying to reveal a tax or burden penalty; or

    faking your tax matters.

It is unrelated to whether you have earned from “deliberate conduct”. Plotted behaviour is described as a taxpayer comprehending that an entry in a tax return was faulty, but they submitted it anyway. Tax fraud cannot be executed accidentally and the CDF is not fair to those desiring to reveal just sloppy mistakes or errors.

Code of Practice 9 contains taxation losses carried via Missing Trader Intra-Community (MTIC) fake and the loss of excise duties through your deliberate behaviour.

What is HMRC Contractual Disclosure Facility?

HMRC will mail an opening letter informing you of their suspicion of tax fraud. This letter will contain a copy of COP9 & the offer of a contract via the CDF. It is crucial to consult Specialist Tax Solicitors as soon as you obtain this communication from HMRC because it is important to respond within 60-as soon as the letter is received. If you don't reply at this time, HMRC will cancel their CDF offer.

What is the result of joining a CDF?

By concatenating the CDF you will confess that tax has stood withheld from HMRC due to your deliberate behaviour. As such, HMRC will be authorised to recover tax, penalties and interest that you bypassed from twenty years to the present.

A CDF signifies that you will be needed to co-operate with HMRC (with the help of Specialist Tax Lawyers), which assures the most amazing likely reductions on any penalties due.

What happens if the Contractual Disclosure Facility is rejected?

HMRC will start its investigations if you sign the CDF Rejection Letter. A Rejection Letter can be used in tribunal or Tax Tribunal proceedings, hence legal advice should be taken before communicating with HMRC.

It is important to consult a Tax Investigation Specialist because even if you plan to accept the CDF, if the Outline Disclosure is wrongly filled in then HMRC will not be bound to follow their side of the contract.

What are the Different Types of Capital Allowances?

If you desire to build an asset for the long term, capital investment is the most suitable method. The funds spent on it are normally a document that becomes the part of balance sheet. It is recorded as a fixed asset as well. If you seek to claim the capital allowance, it will enable you to lower the tax bills as well as annual taxable income. Moreover, the capital allowance has a probability of availability but it is a substantial part. Are you confused about what other kinds of capital allowances are?

Before further analysis, let’s see what this manual covers to answer the FAQs. If you are a newbie, you will collect data about the basics like what are the types of capital allowances, What is capital allowance and how do capital allowances work?

 

Contact our team of qualified and professional accountants to get your company accounts queries answered fast. We will help you to decide about your annual accounts by solving all doubts. 

What is Capital Allowance?

Capital allowance indicates a valuable relief that benefits to offset some of the business costs. This turns out to lower the corporation tax bills. Yet, it is necessary to keep in mind that all company expenses are not eligible to qualify for this objective. HMRC turns out to be helpful well regarding some of the company expenses allowing for the capital allowances. See the below-listed options for a detail:

• Compressor
• Refrigeration Unit
• Electrical Vehicle Charging Point
• Office Chairs and Desks
• The cranes, drills and ladders
• The Tractors, lorries and vans
• Computer equipment and Servers 
  
  

Moreover, a few items are not allowed to be eligible for this claim. The items that your business received, the items you owned before even you started the business, and the cars are a few such examples that are ineligible for the claim.

How do Capital Allowances work?

The span of capital allowances and the significant rates are different. This helps to figure out the percentage of the cost of assets that needs to be recorded for every tax year.

What are the Different Types of Capital Allowance?

When it comes to the types of capital allowances, there are two major kinds. These are known as plant and machinery allowances structures and building allowances. People usually mistake land remediation relief with capital allowance but this is a corporation tax relief, not capital allowance. 

Claiming Tax Relief for Enterprise Investment Scheme

 What Is the Enterprise Investment Scheme?

Enterprise Investment Scheme (EIS) is designed to raise capital for smaller, riskier companies in the United Kingdom. This investment program helps enterprises for growing faster as it offers tax relief to the investors who buy new shares in the company. It encourages new investment in higher-risk trading companies. 

How does your company qualify as an EIS company?

Both the companies and their investors fulfil the below requirements to qualify for EIS tax relief: 

• The company must have a UK permanent establishment and be unquoted;
  
  
• Before the investment company's gross assets must not exceed £15 and £16 million after the investment;
  
  
• For the knowledge-intensive company, the number of full-time employees must not exceed 500 or 250 for other;
  
  
• The company must be aiming for development and growth in the long term;
  
  
• There must be a substantial danger to the investor that there will be a loss of funds over the amount of net investment return;
  
  
• The company must only have qualifying companies:
  
  
• The company must not be under the authority of another group; 
  
  
• The company must not be in an economic problem;

A company can raise a maximum of £5 million through the EIS scheme and £10 million for Knowledge Intensive Company.  

Taxpayers must obtain Form EIS3 from the company to claim tax benefits. The investor loses their tax relief claim if the company loses its qualifying status despite having no control over the company’s decisions.

What is a Knowledge Intensive Company?

Knowledge Intensive Companies are firms that are carrying out R & D, or innovation at the time of issuing shares. They have a particular status under EIS, and can raise more EIS investment, more flexibly, than non-KIC companies.

What is the inheritance tax position in relation with the EIS shares?

Once a two year ownership term has been satisfied, shares will attract Business Property Relief at the pace of 100% and thus escape inheritance tax. 

We can provide you complete assistance with the correct advice at the right time to make sure that an investment is appropriately structured to attract EIS relief.

Our tax accountant in UK review your company and the nature of your trade and apply for advance EIS assurance that the firm is a qualifying company running a qualifying trade.