Often, busy schedules lead to last-minute preparations, resulting in a lack of clarity about tax obligations and even how much is owed. The 31st January 2024 is the most important deadline for self-assessment tax returns. If you’re filing your tax return online for the year 2022-2023, as it must be submitted to HMRC by midnight on that date.
Tax obligations can be complex and it is essential to understand not only your income tax, but also National Insurance contributions, VAT (if applicable) and any applicable deductions.
“Many tradespeople underestimate their tax liability or miss out on allowable expenses,” says Kevin Thomas of Indigo Group. “You need to ensure you’re not overpaying or underpaying by understanding the nuances of your tax obligations. Starting early can significantly reduce stress and provide ample time to address any discrepancies. It also helps in efficient cash flow management, ensuring you have the funds ready for your tax bill.”
Self Assessment Preparation
Gather Financial Records: Ensure all your invoices, receipts, bank statements and records of expenses are organised and up-to-date.
Understand CIS Deductions: If you’re a contractor or subcontractor under CIS, understand how this impacts your tax return.
Deduct Allowable Expenses: Identify which expenses are allowable for tax purposes to reduce your taxable profit.
Calculate Preliminary Figures: Estimate your income, expenses and tax liability to avoid surprises.
Seek Professional Advice: If in doubt, consult with an accountant or tax professional who can provide tailored advice, especially in complex areas.
“Contractors will find it an extremely busy time as subcontractors approach them for their earnings statements,” continues Kevin. “This is where Indigo Group can help those with a subcontracting workforce; every subcontractor’s statement of earnings is held and uploaded to the individual subcontractor’s safe and secure Indigo portal. This means they can obtain this information directly from us ready to complete their tax returns – saving time and hassle for everyone.”