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Tax returns are not everyone's cup of tea, they are time consuming, stressful and really require good book keeping to ensure all is in order.
My top 7 tips for a stress free tax return are:
1. If it is your first time as a self employed person, then make sure you register in plenty of time as it takes a few weeks to set things up with HMRC.
2. Have a folder with a section for each month where you keep your receipts, annotate details of expenses and tally them up on a monthly basis. I also take photos of my receipts and up load them in a folder called receipts on my computer.
3. Create a separate folder on your computer for your tax return for each year so that all your yearly Tax return documents are saved in one place.
4. Create spread sheet (1) on the computer call it "Earnings", I find Excel a good programme to use. Have a column for each month and record your earnings. Tally them at the end of each month.
4. Create a second spread sheet (2) and call it "Expenses", create a column for each month and record your expenses.Tally them at the end of each month.
5. Create a third spread sheet (3) and call it "Invoices" in this sheet keep a record of all your invoices, who they were sent to, date they were sent, and the date you were paid. Tally them at the end of each month.
6. Keep your spread sheets updated regularly so that you do not forget any thing. At the end of your tax year all you need to do is add each months details to get your yearly tax expenses and earnings.
7. Do not procrastinate over tax matters if you update regularly there will not be a last minute panic.
Many people employ an accountant to do all the hard work but bear in mind that accountants are not super human and they can only help you as much as you help your self. If you keep good records then all you need to do at the end of the year is to pass all the details to your accountant for them to do your tax return. There are many accountancy companies that will do your tax return for you, one particular company that offers this service is Brighton accountants Plummer Parsons. It's always a good idea to chat to your accountant, they will offer you lots of good advise and help to make your life easy. Some accountants even offer ready made templates for you to record your income and expenses.
Finally remember that you must put aside some of your income on a monthly basis to pay the tax man, otherwise you will be in a big shock when the bill comes!!