End of Year Tax Tips for the Self-Employed

For many the end of the year means holiday planning, New Year’s celebrations, and visits with family and friends. It also means that the deadline to pay your tax is fast approaching.  

In the TransferGo Blog, we have frequently written articles about pursuing the goal of being self-employed. We’ve written about selecting the right type of company structure, highlighted hobbies that can be a source of additional income, profiled small businesses, and given some advice for selling your goods or services internationally. This time we’ve got some tips and resources to help you through filing and paying your taxes.

Good record keeping is important. If 2016 was your first year of self-employment, you may find that some of your record keeping was not as complete as it could have been. Take some time to go through your notes, work and appointment diaries, and receipts in order to take advantage of all of the tax breaks to which you are entitled.  

  • Keep a record of business mileage. Business mileage claims can make a significant difference in your tax liability. Currently you can claim 45p per mile for the first 10,000 miles and 25p mile thereafter. Trips to the bank, post office, client meetings, and to pick up supplies for anything related to your business can usually be claimed. The easiest way to keep records is to record your milometer readings at the beginning of the working year and again at the end, and write all of your business trips in your diary.
  • Remember, you have to file a return for your self-employment business even if you had a net loss for the year.
  • Keep receipts for everything. Documentation is key. If you make a trip to Tesco and purchase business and personal items, mark the business items and file with your tax documents.
  • If you have an office in your home you can claim the expenses for that portion of your house as a business expense, that includes an allowance for heating and electricity.
  • Once your business reaches a certain level, you will most likely need to obtain the services of an accountant. Accountancy services can often pay for themselves in terms of business savings and they also qualify for tax relief, so it’s worth looking into.
  • If you are self-employed and still working at your ‘regular’ job you can claim losses from your business to offset the tax liability from your salary.
  • Pay strict attention to deadlines. Being even a day late in filing documents can cost you £100.
  • Consider using a tax specialist to help prepare your tax return. Often these services will pay for themselves by applying rules and deductions that you could otherwise overlook.
  • Place your records and returns in a safe place. HMRC requires that your keep all records for six years.

Help is available

There is a wealth of help available online. Here are some useful websites.

Gov.UK – The UK government website is actually very good at providing information and guidance. The site is written in plain English and is easy to navigate.

Money Saving Expert – This site is loaded with useful information and links.

Which – Which has several really excellent articles on taxes in general along with a nice series on self-employment taxes.

1Office – The UK tax code has been universally hailed as one of the longest and most complex in the world. It can be confusing for UK natives and even more so for those who are new to the UK. 1office provides a clear introduction that helps explain many of the terms and nuances.


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