In collaboration with Contact Numbers UK
Ah… tax returns! Before I became self-employed I thought they sounded like a right hassle and it’s one of those things that initially put me off turning my blog into a business. I’d pictured it being a painful, slow, complicated activity. While it can be difficult (especially your first time) it’s made much simpler by being prepared.
I submitted my first self assessment tax return this year and believe that planning ahead was the #1 reason that it was a stress-free experience. With January out of the way, and inspired by Contact Number UK‘s #LetsTalkTax campaign to encourage us to talk about tax more and get in touch with HMRC if we need help, I thought I’d sit down and share how I made filling in my tax return easier.
If you’re preparing early for your next tax return (or you’re reading this in the future!) I hope these tips help!
#1 – Track your income and expenses from the beginning (and regularly)
This HAS to be my number one piece of advice. Knowing what you’ve earned and spent throughout the year, right from the start, means you don’t need to look back through bank statements, piles of invoices or your emails. You’ll have the figures you need for the income and expenses sections in your tax return at a glance. This is so useful!
For my first year I didn’t track my income and expenses effectively, which meant spending the end of the year scrambling together a spreadsheet and combing through my transactions to identify which were business expenses.
For the current tax year I’ve got it sorted. I’ve invested in Dubsado* (* = affiliate link), an amazing client management system which also happens to be wonderful for tracking income and expenses. Every month I dedicate time to updating my income, adding in business expenses and checking my reports to keep an eye on my profit. This not only helps me when it comes to tax return time but it’s been so useful in helping me keep an eye on my business – what’s profitable, which months have been the most successful, and which areas of my business cost the most. It’s a minimal monthly cost (which you can expense!) but Dubsado* absolutely worth it for me.
Tracking your income and expenses also helps when it comes to working out how much tax and national insurance you’ll pay. If you know an estimate weekly or monthly profit figure, you can use HMRC’s self-employed ready reckoner to estimate your self assessment tax bill.
#2 – Introduce a filing system for your emails
Having an organised system for your emails has so many benefits – one of which is that it helps you find important information more quickly. Since I introduced a labelling system in my emails I’ve been more productive, missed fewer enquiries and cut down on the time spent looking for specific emails.
I use Gmail, so I’ve created ‘labels’ (in other email providers they might be ‘folders’) to help me sort and organise my blog emails. Here’s an example of some of mine along with what I use them for:
- Brands / PRs (for filing press releases, conversations with brands/PRs, etc.)
- Finance (for emails with invoices/POs attached, conversations with finance teams, etc.)
- Invoices To Be Paid (for keeping track of contacts who are yet to pay)
- Expenses (for receipts, evidence for claiming business expenses)
I also use labels for organising my blog in general – so have one for conversations with readers, one for gift guides, one for collaborations in progress and so on.
If you don’t use labels yet I really do recommend it. It’s especially useful in Gmail if you colour code them, as you can look at your inbox and see at a glance what’s happening.
#3 – Check you’re claiming all the expenses you can
If you’ve had a great year you might find yourself paying quite a bit of tax on what you’ve earned. It’s necessary and it helps the world go round, but do check that you’re claiming all the expenses you can. It’s best to do this before you start your tax return, and ideally at the start of the year – so you’re keeping track of them as you go.
There are quite a few things that I definitely forgot to list as expenses in my first year. One of the first that springs to mind is using simplified expenses to cover costs of working from home. I do all my blog and business work from home so could have claimed up to £216 in expenses. It’s not a huge amount but it can make a difference if you’re a low earner, and it’s another few £s back in your pocket.
If you’re not sure what counts as an expense as a blogger, I’d highly recommend checking out this list of blogger expenses from Capture by Lucy. It’s a useful list and I’ve already spotted a couple of expenses (like my professional subscriptions) that I can claim back for the next tax year.
Knowing in advance what you can and can’t claim for, and listing your expenses in advance, really helps save time and stress when it’s time to submit your tax return.
#4 – Talk to others, especially those in your industry
One of the best things about blogging is the community. Having a group of people you can talk to openly and honestly about your profession, and to seek help when you need it, is invaluable.
If you’re feeling lost or unsure when it comes to your tax return, seek out help from your community. Whether you’re in the tourism industry or PR, there’s bound to be a regional or national organisation or member group that’s full of knowledgeable, friendly folks. And if you can’t find an industry-specific group, try your local Chamber of Commerce or another business support group.
#5 – Call HMRC if you’re not sure
Finally, my last tip is to speak to HMRC themselves. It can sound daunting, but whenever I’ve called HMRC about my self assessment tax return or government gateway account they’ve been SO helpful. I called them just after we moved house. I’d ended up in a pickle – I couldn’t login as I’d changed (and not updated) my phone number and I’d moved house, so couldn’t receive a new code by post. One quick call to HMRC and they’d updated my phone number, my address and answered my questions about whether I’d need to do anything else to submit my tax return. It didn’t take long and I was reassured that there was nothing to worry about.
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