If you’re self-employed then you’ll need to complete a tax return. This is also known as a self-assessment tax return. Either you or an accountant needs to declare your earnings, which you can do online, and then you’ll receive a tax bill.
The tax year is from 6th April to 5th April the following year, and so your return should declare earnings from this period. You don’t have to file your return immediately, and if you file online you’ll have until Jan 31st.
Filing a tax return is not only important because it let’s HMRC work out your tax liability, but it’s also where you can claim various expenses. You claim for all sorts of business related expenses, from a mileage allowance (45p per mile) to a uniform allowance.
It is very important that you keep accurate records. Roughly one in 20 self-employed people have their tax returns investigated, and any discrepancies in your return could make you liable for a large fine.
You should hang on to your records for four years, as the HMRC could investigate you years after you file a return. If you’ve used an accountant, make sure you’ve retained a copy of the return.
Even though accuracy is key, when you’re claiming expenses you don’t need to use exact amounts of money, and estimations are acceptable. If you need any further help with self-assessment then you can look online.