How To Get Ready For The New Tax Year
The UK tax year starts on 6th April and runs to 5th April the following year. It’s the perfect opportunity to reflect on the previous tax year, wise up on any new legislation that might affect your tax return, and look for opportunities to simplify the process and even reduce your tax bill where possible.
Not sure where to start? Not a problem. We’ve asked Mike Parkes from GoSimpleTax to give his best tips on preparing for a new tax year.
Digitalise the tax return process
If you’re still working with paper, let 2021/22 be the tax year you move online. After all, paper tax returns need to be filed three months before the online one, and they’ll be phased out in a few years as part of Making Tax Digital (MTD) anyway. So, why not make the change now?
MTD is an initiative launched by HMRC to make it easier for the self-employed to keep on top of their tax affairs. From April 2023, they want all sole traders to submit their self-employed income and expenses online and on a quarterly basis.
What’s more, moving online can often remove some of the time, stress and mistakes that usually come with a paper tax return. There’s even dedicated tax return software, like GoSimpleTax, that’s designed to make it much easier to log income and expenditure throughout the year, and then submit this information straight to HMRC. We’ve even created a Making Tax Digital checklist for that little extra bit of help.
Record income through invoicing software
Once you’ve moved your tax return online, whether that’s through software or HMRC’s Government Gateway, start requesting payment digitally with invoicing technology.
Invoicing tech formalises your payment process. Instead of sending over Word or Excel invoices, this software can send fully branded requests to your clients. They can also integrate with things like your Gmail account or your preferred payment solution, such as PayPal or SumUp.
Plan ahead to reduce your tax bill
The moment that the new tax year starts, you're free to file last year's tax return. My advice is not to wait, as tempting as it might be! This is the point where all your income and expenditure is fresh in your mind, so it’s far easier to collect up all the evidence and use it to submit an accurate tax return.
Filing a tax return early doesn’t mean you’ll have to pay your tax bill early, remember. It just means that you’ll get your bill almost a year in advance of its due date so that you can better manage your cash flow.
Even starting to complete one early has its benefits. It gives you time to review your expenses and find opportunities to make tax savings. You can save a fortune by identifying purchases that are classed as allowable expenditure, so why not give yourself time to check?
If you take these three key steps, you’ll be in a great position to file your tax return as soon as the new tax year starts – and then you can get back to doing what you do best.
The Cashplus Business Bank Account can store receipts and organise your spending as a Business which could help with any future tax returns. It also only takes minutes to apply for one with our simple online application!
GoSimpleTax software submits directly to HMRC and is the solution for self-employed sole traders and anyone with income outside of PAYE to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.
Try for free - add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.
This content was created on 22nd March 2021
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