Self-assessment can be a tricky affair for self-employed individuals if not carried out correctly. This is precisely why we have created this article for carpenters, heating engineers and electricians so that you can file your self-assessment tax return with ease.
The very first step to file your self-assessment tax return, if you are a carpenter, a heating engineer or an electrician, is that you must register with HMRC as soon as possible. This also means that you need to inform HMRC if you must complete a tax return. You must use two forms and choose the right one according to why you need a return. If you are a newly self-employed individual, you can register using this link. If you need a return for any other reason like becoming a new buy to let landlord, you will need an SA1 form.
You can carry out most HMRC registrations today on their website. It is fairly straightforward to register. All you need to do is enter in some basic information such as the full name, address and date of birth. In addition to that, you will also require your National Insurance number.
In case you are registering as a self-employed individual, you will be required to insert details regarding your self-employment like your address, when you started, the nature of the work and more. In case you have decided to use paper forms to complete the registration process, you will need to post the completed form to the address you find on it. Please always retain a copy of the form for your records.
Once you finish the registration process, you will receive a confirmation of registration from HMRC. They will share with you your UTR or Unique Taxpayers Reference. This reference is unique and you will need it for all your tax affairs henceforth. You must quote it on all correspondence or payments you make to HMRC. They might also ask you for your National Insurance number or UTR if you ever call them with a query.
At the end of every taxation year, you must submit your tax return to HMRC. You can submit it easily on paper by 31st October. Alternatively, it is also possible to carry out the process online in which case the deadline is 31st January. If you are not able to file your return at any point, you will have to pay an automatic fine of £100.
There might also be further penalties according to the length of the delay. In 2018, the rules of penalty changed. Earlier, if the total tax that you were needed to pay before 31st January is under £100, your penalty would simply be whatever you owed. However, this rule is no longer applicable, and the penalty of £100 is now automatic and fixed.
It is also noteworthy that any tax that you owe to HMRC must be paid by 31st January at the end of each taxation year. You can pay HMRC using a number of ways such as Bank Giro, Direct Debit, online banking and much more.
Moreover, as mentioned above, all your income that has already been taxed at source must still be declared by you on your tax return. That said, the tax that you have already paid at source shall be deducted prior to arriving in your final tax bill. Know that in case your tax liability exceeds £1,000 or alternatively if your tax has been collected at source, you might need to make an instalment on 31st January for the tax of the next year too. Again, if you delay paying HMRC, you will have to incur late payment penalties and interest.
The allowable expenses for self-employed carpenters, electricians and heating engineers are more or less the same. You can claim things like insurance, laundry and cleaning, consumable tools, telephone landline and mobile phone when used for your business, advertising and trade magazines. You can also claim the costs of maintenance and repair of equipment as well as the materials that you used for your work.
In the same vein, accountancy fees and travelling expenses are also some costs that you can claim. However, keep in mind that the cost of travelling and fares for business use only can be claimed and not for your personal use. Get Excellent Tax Filing Services From Target Accounting!
Although tax filing for self-employed individuals is quite easy and straightforward, it can be a pretty time-consuming process, and you might end up stuck at places. Therefore, you can get in touch with us here at Target Accounting so that you do not end up paying more tax than is required.