Drivertax: The right questions and answers to keep you ahead of the taxman

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Q. When is my tax return due?

A. Now guys for anyone who hasn’t done their 17/18 tax return, get it in now! Your self-assessment tax return is not due until 31st January, but you shouldn’t just wait around. The important bit is that you have from 5th April until 31st January the following year to get your receipts and income sheets in order and produce and submit your tax return to HMRC and of course pay your tax bill. This means that the earlier you do your return the more time you have to get your money together and the more time you have to get proper advice and prepare yourself.Q. What are good books and records

A. HMRC say that as a sole trader you must keep “contemporaneous books and records”. That just means income and expenses as you go along. This can often be a hassle, but it comes down to everything out less everything in, leaves your profit - and that’s what you are taxed on.

The secret is what you can claim for and what you can’t in those figures. We’ve all got to do a tax return; At Drivertax we’ve tried to make the whole process simple, by providing you with a helping hand to make sure you claim for everything you are entitled to...Q. What can I claim for?

A. Firstly you need to start keeping receipts for the items you buy and the items you pay for. You must keep your receipts for six years. There are many things you can claim for and it often depends on your accountant’s interpretation of the HMRC guidelines and their bravery in defending your claim. The HMRC says you can claim for any expense genuinely used for the purpose of your business. So, fuel, motor expenses, mobile phone and car washing are included but sometimes we can look at subsistence (food and drink whilst travelling) and work clothes. You can learn more on our website here. Q. What is national insurance?

A. National Insurance is a tax system paid by workers in order to fund state benefits. When you become self-employed your National Insurance contributions are now made through your tax return. Self-employed people pay class 2 and class 4, these will be organised by your accountant. As a self-employed sole trader, the National Insurance Contributions you have to make are Class 2, which is £148.20 and Class 4, which is 9% of profits over £8,424.

Q. If I’m not registered can the HMRC find me?

A. The HMRC is being more and more computerised with the onset of MTD (Making Tax Digital).

Most of us nowadays have a digital footprint from our licensing to social media through to paying our bills, and so yes more than ever the Taxman can find you, it’s just a case of when…

The good news is that its possible to go to them or negotiate with them when they find you. The Revenue will decide if your behaviour is negligent or malicious and fines you accordingly. In this case you are better being a fool than a fraudster. Once again take advice.

At Drivertax we are very experienced at dealing with this and will fight your corner.Q. How do I register as self-employed?

A. It’s easier than you think. At Drivertax we do this for all our clients at no extra charge - no accountant should really charge you for the process.

It’s as simple as filling in a form to register with HMRC fill in a ‘CWF1 Form’. But be careful because the information will be checked and there are some tricky questions.

Q. What should I be paying my accountant?

A. This is a difficult one, good value is not always what it seems. Many accountants will charge a low price to do a tax return but then will charge for ‘extras’ such as a letter for a landlord or mortgage reference. Also, many accountants will not be interested if you get a tax enquiry or charge you high fees.

Look for an inclusive charge. Good accountants deserve to be properly paid for the work they do but your relationship should be based on mutual trust, and a total service.

Look for a charge that includes help if it all goes wrong, that’s when you know if you are getting value.At Drivertax, we charge a set fee of £360 including VAT for a sole trader tax return. TaxiPoint have negotiated a discount if you choose to use our services of £30 off your first year with Drivertax.Find out more by visiting here.

January 10, 2019 at 10:06AM http://bit.ly/2UVulRY Drivertax THESE POSTS ARE NOT OUR ENDORSEMENT