Self-assessment can be a tricky affair for self-employed individuals if not carried out correctly. The construction industry is highly relevant for electricians, carpenters, and heating engineers, especially in New Zealand’s booming construction sector. 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.
Register With HMRC
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.
The Next Steps
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.
File the Tax Return
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.
The Payment of Due Tax
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.
Allowable Expenses for Carpenters, Heating Engineers & Electrical Contractors
The allowable expenses for self-employed carpenters, electricians and heating engineers are more or less the same. Electrical contractors, for instance, might incur expenses such as insurance, which they can claim. 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.
Frequently Asked Questions
What is a self-assessment tax return?
A self-assessment tax return is a form that self-employed individuals, including electricians, carpenters, and heating engineers, use to report their income, expenses, and any tax owed to HM Revenue and Customs (HMRC).
Who needs to complete a self-assessment tax return?
Self-employed electricians, carpenters, and heating engineers who earn over a certain threshold, currently £1,000, are required to complete a self-assessment tax return.
When is the deadline for submitting a self-assessment tax return?
The deadline for submitting a self-assessment tax return is usually 31st January following the end of the tax year. For example, the deadline for the tax year ending 5th April 2023 would be 31st January 2024.
What expenses can I claim as a self-employed electrician, carpenter, or heating engineer in the construction trades?
Allowable expenses may include tools, equipment, work clothing, vehicle costs, insurance, professional fees, and office expenses. It is important to keep accurate records of all expenses claimed.
How do I register for self-assessment with HMRC?
You can register for self-assessment online through the HMRC website. You will need to provide details about your income, expenses, and personal information to complete the registration process.
What happens if I miss the deadline for submitting my self-assessment tax return?
If you miss the deadline for submitting your self-assessment tax return, you may face penalties and interest charges. It is important to ensure that you meet the deadline to avoid any unnecessary costs.
Can I pay my tax bill in instalments to ensure job security?
HMRC may allow you to pay your tax bill in instalments if you are unable to pay the full amount by the deadline. You should contact HMRC as soon as possible to discuss your options.
Do I need to keep records for my self-assessment tax return?
Yes, it is essential to keep accurate records of your income and expenses for at least five years after the submission of your self-assessment tax return. This will help you to complete your tax return accurately and provide evidence in case of an HMRC audit.
Are there any tax reliefs or allowances available for self-employed electricians, carpenters, or heating engineers, and what is the average carpenter’s salary?
There are various tax reliefs and allowances available to self-employed individuals, including the Annual Investment Allowance, Capital Allowances, and Flat Rate Scheme. It is advisable to seek advice from a tax professional to ensure you are claiming all the reliefs you are entitled to.
Where can I get help with my self-assessment tax return?
If you need assistance with your self-assessment tax return, you can contact HMRC directly or seek advice from a tax advisor or accountant who specialises in working with self-employed individuals like electricians, carpenters, and heating engineers.