Tax Return Information and Tips

Doesn’t Time Fly!

I know it is a phrase overly used but it’s true. This time of year comes around all too soon and before you know it your To Do list is as long as your arm, BUT there’s still one more task you could be forgetting about, your Self-Assessment…

Self-Assessment Tax Returns are due by the 31st of January.

You may have already done your tax return, or have it in hand, or you may be thinking you’ve got more pressing matters to think about like how on earth you’re going to feed 15 people on Christmas day and that’s okay, here at Perfect Balance we can help. We can submit your Tax return for you, easing the pressure and allowing you to concentrate on your Christmas shopping and making those special memories.

Either way, the deadline is looming and the sooner your Tax Return is submitted the better.

Submitting your Tax return early not only helps by avoiding fines, but allows you time to prepare for any payment that may be due. It will also allow you to receive any refunds due nice and early 😊. We also have tiered pricing so if you instruct us and return the items we need by the 1st of September each year, our fees are lower.

Self-assessment is a system the HM Revenue and Customs (HMRC) uses to collect Income Tax. Tax is usually deducted automatically from wages and pensions.

You must send a tax return if you are:

Self employed as a sole trader and earned more than £1000 (before taking off anything you can claim tax relief on)
A partner in a business partnership

You will not normally have to send a return if your income is from wages or pension, but you may need to send one if you have any other untaxed income such as:

Income from Property Rental
Tips and commission
Income from savings, investments and dividends
Foreign income

If you are unsure if you need to send a tax return please click on the link below to check.

Check if you need a Tax Return

Other reasons for sending a return:

To claim some Income Tax reliefs or prove you are self-employed to enable you to claim Tax-free Childcare or Maternity Allowance.

Costs you can claim as allowable expenses

These include:

Office costs, for example stationery or phone bills
Travel costs, for example fuel, parking, train or bus fares
Clothing expenses, for example uniforms
Staff costs, for example salaries or subcontractor costs
Things you buy to sell on, for example stock or raw materials
Financial costs, for example insurance or bank charges
Costs of your business premises, for example heating, lighting, business rates
Advertising or marketing, for example website costs
Training courses related to your business, for example refresher courses

MTD for ITSA will come into force April 2026. At that time, if you haven’t already you will need to choose a digital accountancy software.

We are huge advocates for Xero and since MTD for VAT came into force we have migrated many businesses over to Xero, have assisted them in keeping their records up to date and filed their returns easily through the software.

Become a pro with Xero Go!

Let’s start at the beginning. MTD for ITSA (Making Tax Digital for Income Tax Self-Assessment) will require small Sole Traders with a combined income of over £10,000 to keep electronic records and submit quarterly Tax Return information via the software. Sounds daunting to some but please don’t panic. This process can actually be a smooth and simple process and will also have the added benefits of keeping you up to date and on top of your paperwork. It will also allow you time to prepare for any Tax Liability you may need to pay.

We ran a live demo covering the following topics:

How to sign up
Adding payments made
Adding attachments and images of your receipts – Sending an invoice
Adding income received
Adding your bookkeeper/accountant
Adding allowable expenses (eg. Mileage claims)
Filing your return
Producing reports

This provides all the tools you need to set up Xero Go and keep on top of your accounting on a regular basis. To watch the video, click on the link below.

Have you heard of Xero Go?

Xero Go is designed to ease the financial admin burden for small Sole Traders. If you’re Self-employed and non-VAT registered, Xero Go is well suited for you.

Xero Go is a free simple app with paid add-ons to choose from*.

*Add customised invoices (free for 30 days from your first invoice then £4.99/month) and connected payment services (fees apply to some) to get paid faster.

For more information, please click on the link below :

https://www.xero.com/uk/small-businesses/self-employed/xero-go/

If you’re after more tools and would prefer a desktop version there are other Xero plans you might be interested in.