Taxes can be difficult to navigate, especially as a freelancer. If you have never had to file your own taxes before, you may be unsure how the process works. Paying your tax doesn’t have to be scary and if you ensure you cover all bases and file your taxes correctly, the process can be simple and stress-free.
The first step to paying your taxes is to register yourself. You must register with HMRC for self-assessment and set yourself up as a sole trader. This is only necessary If you earn upwards of £1,000 annually as a freelancer, as any income below this doesn’t need to be declared.
Once you have set up as a sole trader, you will need to register to pay your taxes through self-assessment. This is easy to do and can be done online or via post and is as simple as filling out a form.
Self-assessment must be registered before October 5th in the previous tax year, as if registered late you may incur penalty fees.
Once you’ve registered and have collated all your information, it’s time for you to submit your self-assessment tax return! Again, this can be done either online or via post.
There will be two forms for you to fill out: your main tax return (SA100) and a form for if you earn either above or below the threshold (SA103S/SA103F).
Once submitted, your tax payments will be calculated and you are all set to pay your taxes. Sounds easy, right? It’s much simpler than it seems and keeping on top of your tax returns is an important part of avoiding trouble and ensuring you aren’t going to end up paying more in penalties and late fees.
However, if you feel that you may struggle to complete your self-assessment by yourself, there are many tools at your disposal to ensure you don’t fall behind.
There are many online services you can utilise that can fill in your forms for you. You simply provide the details needed and the service will fill in and send off your return for you. This means you needn’t worry about keeping up with deadlines as everything will be processed for you.
Another option is getting yourself an accountant. Accountants may seem like an extra expense, but they can help you save money on your taxes and can simplify the process even more.
Having a professional filling out, filing and organising your tax returns takes the job off your hands entirely and means you have access to professional advice when it comes to your taxes.
This includes talking to your accountant about business and personal expenses and also any possible deductions. They will likely be able to save you more money on your tax than the cost of their services.
Accountants are knowledgeable in tax legislation and will be more able to fill your forms in correctly than you, meaning you will always be up to date and have no need to worry about missing deadlines and penalties.
Looking for an online accountant for self-assessment tax returns? Contact YRF Accountants today.