With the new tax year upon us - it’s time for some of you to start getting into better habits to help ensure you only pay the tax that you owe and not a penny more.
Whilst small receipts for fixtures and fittings seem minor at the time, losing multiple receipts like these can accumulate to affect your tax bill in the long run.
Keeping, storing and filing receipts has to be one of the most tedious jobs for the self-employed and SMEs. And let’s face it, many of us are guilty of losing receipts (or putting them in the wash in our jeans pocket). But did you know that for every £100 of lost or damaged receipts you will lose around £29 in reclaimable tax? That figure soon adds up over the course of a year.
So, what can you do to be more receipt smart?
Scan receipts as you receive them
The new tax year starts today, presenting an opportunity for a fresh start in how you manage receipts.
Lots of self employed people and SMEs sit on paper receipts, allowing just a few receipts to become an out-of-control mountain. This can prove to be a paper-based nightmare when submission deadlines arise. Rooting through drawers, pockets and folders is the last thing you want to be doing for your self assessment tax return. It’s far better to go digital, choosing a platform that ideally scans and uploads receipts as you receive them.
2. Re-check every expense
Tax breaks on business expenses are vital for the self-employed and SMEs, so make sure you’re not missing out on what’s rightfully yours. It’s worth checking again to see what expenses are allowable.
Double check all your receipts and look back to HMRC’s expense claim guidelines to reveal where you could be claiming back money. Consider everything: hardware, office space, stationery and printing costs… there are dozens of avenues to a legal tax break, providing it helps your business succeed.
3. Use online software
There have been huge advances in technology, and the established financial institutions aren’t too happy about it. That’s because the hole an accountant might fill has been plugged with real-time, automated software.
Mike Parkes is the technical director at Go Simple.