How to claim mileage allowance when you’re self-employed.
Article written by GoSimpleTax
Whether to pick up supplies, drop off deliveries, see customers or make site visits to quote for jobs, each year many self-employed people (AKA sole traders) rack up thousands of miles on UK roads while running their business.
You may be self-employed and use your own vehicle to drive far fewer miles for business reasons, but even so, you should still claim your mileage allowance. After all, as well as fuel costs, business journeys help to cause wear and tear that can lead to expensive maintenance and repair bills. And, crucially, the more allowances and expenses you claim, the higher your self-employed earnings.
What is mileage allowance?
If used for business, you may be able to claim a proportion of the actual total cost of buying and running your vehicle, including such things as insurance, repairs, servicing, fuel, etc. This option may or may not enable you to claim more. However, keeping track of every cost and working out the exact proportion of business use for your vehicle takes time and effort.
Instead, many self-employed people claim mileage allowance, a flat-rate scheme that provides a much simpler way to claim back the cost of using your own vehicle for business. Mileage allowance is part of a range of “simplified expenses” options that HMRC offers to self-employed people. They’re designed to make tax admin easier and quicker.
How much mileage allowance can you claim?
If you’re self-employed, you can claim a mileage allowance of:
- 45p per business mile travelled in a car or van for the first 10,000 miles and
- 25p per business mile thereafter
- 24p a mile if you use your motorbike for business journeys.
If you use more than one of your vehicles for business, you don’t have to use the flat-rate mileage allowance option in all cases, you could claim the actual cost for some, and mileage allowance for others. However, once you start using the flat rate mileage allowance option for a vehicle you use for business, you cannot change.
If you travel with someone else who also works for your business, as the driver, you can claim an additional 5p per mile for each extra passenger. So, if three of you travel together, you can claim 45p + 10p per mile (two x 5p per mile for the two additional passengers) for the first 10,000 miles, then 25p + 10p per mile thereafter.
Need to know! Claiming mileage allowance doesn’t stop you claiming for other business travel expenses, such as train tickets and taxi rides. Parking tickets and toll fees while on business can also be claimed as a legitimate business expense.
When can’t mileage allowance be claimed?
You can’t claim mileage allowance for personal journeys, they must be made “wholly and exclusively for business purposes”. And neither can you claim mileage allowance for journeys to and from your usual place of work (ie your commercial business premises). You can claim for travel to a temporary workplace, for example, if you’re a plasterer who needs to travel to different sites and jobs.
Simplified expense claims can’t be used for cars designed for commercial use, such black taxicabs or dual-control driving instructors’ cars. Limited companies cannot use simplified expenses either, as they’re only available to self-employed people.
Need to know! You cannot claim simplified expenses for a vehicle you’ve already claimed capital allowances for or one you’ve included as an expense when you worked out your business profits. Where necessary, seek guidance from an accountant.
Three example mileage allowance claims
- You’ve driven 1,200 business miles in your car during the year.
Calculation: 1,200 miles x 45p per mile = £540
Annual mileage allowance = £540
- You’ve driven 10,000 business miles in your van during the year. Calculation: 10,000 miles x 45p per mile = £4,500
Annual mileage allowance = £4,500
- You’ve driven 12,000 business miles in your car during the year. Calculation: 10,000 miles x 45p per mile = £4,500, plus, 2,000 miles x 25 per mile = £500
Annual mileage allowance = £5,000
Working out your business mileage
Logging your business mileage is a good idea, as it can make it far easier to later work out and claim your mileage allowance. And your claim is more likely to be accurate and credible if HMRC can see precise details of dates, miles travelled, journeys and reasons. HMRC can request proof during an investigation.
It can be wise to get into the habit of recording details after every journey for which you plan to claim mileage allowance. Manually recording your business mileage takes more time and effort, while scraps of paper and notebooks can go missing, so it’s better to record and store your mileage details in a spreadsheet/software, with data stored safely online. Many apps have been created to help business owners track and record their business travel mileage (some even use GPS to automatically measure business mileage).
Some self-employed business owners simply estimate their business mileage, by claiming for a percentage of their vehicle’s total annual mileage. So, if your car does 1,000 miles a month and you can show that half of that is for business use, you can claim mileage allowance of 6,000 miles a year (ie £2,700).
How to claim mileage allowance
Good accounting software will do all of the hard work for you, saving you lots of time and hassle. You enter your business mileage and it calculates your mileage allowance, which you enter into your Self-Assessment tax return. The amount is taken into account and your tax liability is reduced as a result.
If you use simplified expenses to claim mileage allowance, you cannot claim for motoring costs such as insurance, road tax or fuel, because these are accounted for within the mileage allowance.
Need to know! Deliberately inflating your mileage allowance claim can lead to penalties. HMRC takes a very dim view of anyone who deliberately enters false information into tax returns.
For more information
- Visit government website Gov.uk to read Travel – mileage and fuel rates and allowances. There is also an online tool that enables you to Check if simplified expenses could save your business money.
About GoSimpleTax
Income, expenses and tax submission all in one. GoSimpleTax will provide you with tips that could save you money on allowances and expenses you might have missed.
The software submits directly to HMRC and is the solution for the self-employed, sole traders and anyone with income outside of PAYE to file their self-assessment giving hints and tips on savings along the way. GoSimpleTax does all the calculations for you saving you ££’s on an accountant. Available on desktop or mobile application.
Try for free – Add up to five income and expense transactions per month and see your tax liability in real time – at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading and HMRC direct submission.
Winning in business – celebrating your success!
We love your good news so when we heard that Isobel Chaplin who set up her business 18 months ago had won her first award on top of having a record breaking profits year we were over the moon to share her article about her growing business and her first award.
Winning awards is a great way to understand your business, how it is percieved and get some free press to celebrate your business and stand you a part from your competitors. Don’t just put your award on your social media and hope it will bring in customers, it won’t!
Isobel works with our Founder Mandie Holgate as her coach and here Isobel shares how it feels to win that first award for her new business;
“My coach reminded me that I should be shouting from the rooftops about my SME News UK Enterprise Award. It’s not something I feel comfortable doing so Mandie Holgate sat and interviewed me because we really should celebrate our wins, shouldn’t we?
As small business owners we work so hard and I’m not sure enough of us take time to celebrate, so thanks to Mandie, here I will share my win. Let me know what you think.
Q: What made you enter the awards?The entry came as a complete surprise. I received an email from SME News to inform me that IJC Finance had been nominated as the Best Emerging SME Accountancy Practice for Essex AND for a Distinction Award for Customer Service Excellence, and I was shocked to be honest. In a good way, of course! I had seen the awards advertised but hadn’t dreamt of entering because of the business being quite young and I wasn’t sure we’d been seen to have enough experience. I think it’s great they have awards for all types of businesses, no matter whether in their infancy or if well established.
Q: How did you feel when you realised you were a finalist?I was told we’d been shortlisted but didn’t expect any more to come of it. This was a typical “Isobel” thought process at the time – I’m quite humble and didn’t think any more of it!
Q: In true Oscars or Miss World style “What does winning mean to you?”It’s given me a real boost in confidence. I think all business owners have moments where they think “can I really do this?”, no matter how long they’ve been in the game, and receiving the nomination and then the award has cemented my self-belief. It’s given me the push to enter more awards of my own volition. You have to be in it to win it so they say, and if anything it’s given me an opportunity to explore the business’ strengths and weaknesses in more depth.
Q: How do you feel this reflects on your business ambitions?My mission has always been to offer a personable and reliable service to small businesses so they feel valued and not just a number (that’s almost a tagline now). Being presented with an award as the Best Emerging SME Accountancy Practice of our region is a fantastic achievement for us, given that we had only been properly up and running for 18 months when the award came through. Also triumphing with a Distinction Award for Client Service Excellence shows me that we are surpassing the standards we set for customer care, which is one of our focuses for continual improvement, and the award helps us to stand out compared to our competitors.
Q: What do you feel it does for your clients?I like to think that our clients are cheering with us about this award. We’ve received a lot of positive feedback and congratulations, and the recognition has helped showcase our standing in the local accounting community as well. Showing potential clients that we have what it takes to meet their needs, and that we were even nominated let alone won the award, is also great for advertising. I think it gives our clients the reassurance that they are in safe hands.
Q: What would you say to someone thinking of entering an award for their business? What should they consider?Do it! Since winning the award we have entered more national and local awards, not necessarily with the expectation of winning, but in just writing our entries it has provided moments when have sat and thought about all the wonderful things we do that we are proud of. That’s something that business owners’ don’t normally do; we are often very critical of ourselves, so doing an exercise on shouting about how great we are has so many positives!”
We are so excited for Isobel who is an active member of our networking events and our mastermind group. If you would like support to grow your business as an Insider and member you can also share your good news, insights, advice and ideas in our blog for free!
Isobel is such a valued member of our mastermind group the Insiders Isobel will be speaking for us at our July event. We look forward to welcoming you too.
And for more essential reading to look after your money, Isobel has some great articles for you to benefit from. Head to her site for the full story;
Getting things right from the off
So, you’re new to running your business. Or perhaps you’ve been doing it a while and you’re not happy with the way you’ve been dealing with (or perhaps, not dealing with, as the case may be) the business’ finances. I think it’s important to start off any business ventures well organised and having thought through how you’re going to keep track of everything you’re doing in a monetary sense. It sounds obvious, I know, but so many business owners are perhaps a little afraid to face the finances as it all seems a bit daunting. By making sure you have set yourself a few rules to get going, it doesn’t have to be too complicated or time consuming. Step 1 Make sure you have a separate business bank account set up for all your business transactions. For limited companies it’s a mandatory requirement, so it’s one of the first things you should do once you’ve got your business registered with Companies House. Some formation companies even tag on the bank account as part of the process. Although it’s not a deal-breaking requirement for sole traders, it’s something I’d strongly recommend. If thinking about your tax return is a daunting prospect, then having all your transactions on one place makes….
Sole Trader or Limited Company?
I often get asked by business owners whether they should trade as a sole trader or under a limited company. It’s a decision that’s sometimes simple to make, but there are pros and cons to be considered and you may find that after some thought one style suits your business better. I will explain more on the key differences below and offer some food for thought…
Guide: Payment on Account
Payments on account can be one of the most common stumbling blocks when it comes to your self-assessment tax return. Although it was introduced as an initiative to help taxpayers spread their tax payments, it can often result in annual frustration and can actually harm your cash flow if you are caught unaware.
Payment on account: What you need to know
The 31st January is the deadline everyone knows about, you must file your tax return and pay any taxes due. However, if you have a self-assessment tax bill of more than £1,000 a payment on account may also be required.
On 31st January each year you may need to make a payment to HMRC. This payment will settle any outstanding tax for the last tax year, plus an upfront payment for the next tax year.
You would also need to make a further payment on account on or before the 31st July per year.
Both payments are based on what you earned last year, instead of the current state of your finances. That’s because HMRC can’t predict how your income is going to fluctuate; it’s assumed that you’re bringing in the same, every tax year, even though that might not be the case.
So, how is the payment on account calculated?
Basically, any payment on account due is equal to 50% of the previous year’s tax bill.
Whether it is the first time your tax bill is over £1,000 in a tax year or it is your first year of trading you need to know what to expect the first time you make a payment on account.
As an example
If you began trading in 2020/21 and have a tax bill of £1,400 for that year the tax bill would need to be paid on 31st January 2022.
However, because your tax bill is over £1,000, you’d also have to make your first payment on account for the 2021/22 tax year. This is calculated as 50% of the amount due for 2020/21.
In this case that would be £700. This means that you’d owe £2,100 to HMRC on 31st January 2022.
20/21 tax bill = £1,400
21/22 upfront = £ 700 (1st payment on account)
Total = £2,100
A further £700 would be payable 31st July 2022 (2nd payment on account).
As a side note, Class 2 National Insurance contributions are not included in the calculation for payments on account, this is in fact deducted before multiplying your tax bill by 50%. But for simplicity, this hasn’t been taken into account in the calculation above.
INsiders receive a 10% discount on GoSimpleTax by signing up at www.gosimpletax.com/insiders
Can I reduce the payment on account due?
Yes, this is possible. It’s important to remember that payments on account are based on your earnings from the previous year. This means that, should your income dramatically fall, your payments on account may be reduced to reflect a lower income. You can therefore make a claim to reduce your payments on account. Be careful though: reduce them too much and you can incur an interest charge on any tax shortfall.
What if I can’t afford it?
Under normal circumstances you should contact HMRC as soon as possible. Should you miss the deadline without informing them, you’ll start to accrue interest and late payment surcharges.
By contacting HMRC they may agree a time to pay arrangement, you will still be charged interest but you could avoid any surcharges.
How to pay
HMRC, in light of MTD for Income Tax, are encouraging more people to complete their self-assessment tax return digitally online. This can be done in most cases via the HMRC website or commercial digital software. Should you file your self-assessment online you will be able to make your payment on account at the same time should you chose. If you are submitting your return via a paper return you will receive a paper bill with a Bank Giro form for you to make your payment.
With all matters relating to tax if you are unsure you should speak to someone with tax knowledge or call the HMRC. It would pay to make regular checks ahead of the deadlines on interest rates and other changes to avoid any penalties.
Income, Expenses and tax submission all in one. GoSimpleTax will provide you with tips that could save you money on allowances and expenses you might have missed.
The software submits directly to HMRC and is the solution for the self-employed freelancers, sole traders and anyone with income outside of PAYE to file their self-assessment giving hints and tips on savings along the way.
GoSimpleTax does all the calculations for you saving you £££’s on accountancy fees.
Available on desktop or mobile application.
How Landlords Can Save Tax With The Marriage Allowance
In the UK, landlords are able to save tax by sharing the Personal Allowance of their lower-earning spouse. This way, they can maximise the total household’s take-home pay without falling foul of the taxman.
However, there are strict rules. And it’s for this reason that we’ve asked Mike Parkes from GoSimpleTax to explain the Marriage Allowance below, along with how landlords can qualify.
What is the Marriage Allowance?
The Marriage Allowance is a tax perk for married couples and those in civil partnerships. It allows households to share part of their Personal Allowance – specifically, the Personal Allowance of the lower earner who is able to transfer £1,260 to the higher earner.
The higher earner will then receive a tax credit equivalent to the amount of Personal Allowance that has been transferred to them. Once the higher earner’s tax bill arrives, there will be a deduction of the same size.
Marriage allowance, are you eligible?
There are two financial requirements you’ll need to meet in order to receive the allowance:
- The lower-earning partner’s pay before tax must be less than the Personal Allowance – which, as of 2021/22 and until at least 2026, is £12,570.
- The higher-earning partner’s salary must fall between £12,571 and £50,270, making them a basic-rate taxpayer.
Provided you meet this criteria, you can request that HMRC transfers any unused Personal Allowance from the lower earner to the higher earner. Within 14 weeks of registering your interest in claiming the Marriage Allowance, HMRC will contact you and ask you to complete an application form.
How does the Marriage Allowance work?
Once HMRC has approved your transfer application, the lower earner can give a maximum of £1,260 to their partner’s Personal Allowance. If the lower earner has an income of less than £11,310 (the Personal Allowance minus £1,260), you can do this without being liable to pay any tax.
Currently, those earning above £11,310 but below £12,570 can still transfer £1,260 of their Personal Allowance, but they will become liable to pay tax on any income in excess of £11,310. This means the higher earner still makes a saving, but the total saving made by the household is lower.
It’s worth bearing in mind that you’re able to claim Marriage Allowance while on maternity leave or if you’re unemployed. However, once set up, this allowance will be transferred to the higher-earning spouse automatically every year until you cancel it or until your partnership comes to an end.
If your financial situation changes midway through the tax year, don’t worry – HMRC will simply ask you to disclose your total income at the end of the tax year via a P800 form. Whether because the lower earner exceeds £12,570 or the higher earner exceeds the basic-rate tax band, you’re required to fill out the form, helping HMRC adjust your tax code for the following year.
What are the benefits for landlords?
Provided they meet the above requirements, everyone is eligible – whether they’re self-employed and have a large portfolio or are employed and have invested in one buy-to-let property. The reason why landlords are encouraged to transfer their Personal Allowance is because it allows the household to maximise rental earnings.
This is especially true if the higher earner works full-time while the lower earner handles the property management side of things, as the employment income will come at the cost of rental earnings. However, by transferring some of their Personal Allowance, the higher earner is able to claim more tax relief at no cost to the lower earner.
For more information about how the Marriage Allowance works, and how you can apply for it, check out the GOV.UK website.
Income, Expenses and tax submission all in one. GoSimpleTax will provide you with tips that could save you money on allowances and expenses you might have missed.
The software submits directly to HMRC and is the solution for the self-employed landlord, sole traders and anyone with income outside of PAYE to file their self-assessment giving hints and tips on savings along the way. Available on desktop or mobile application.
Try for free – Add up to five income and expense transactions per month and see your tax liability in real time – at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading and HMRC direct submission.
Get into gear with the SEISS Grants and your self-assessment
The Self-Employed Income Support Scheme (SEISS) has been a lifeline to many sole traders during the coronavirus pandemic. Provided they’ve met the necessary criteria, these individuals have been supplemented with up to 80% of their average trading profits.
However, these grants are taxable – meaning that they’re subject to Income Tax and National Insurance contributions in the tax year in which they’re received. As a result, they need to be included in your Self Assessment tax return.
So, to make that as easy as possible for you, we’ve asked tax return guru and Technical Director of GoSimpleTax, Mike Parkes, to set the record straight on SEISS grants and how to record them for HMRC.
Grant 4 now open
If you have reason to believe that you’ve suffered (or will suffer) a significant reduction in trading profits between 1st February 2021 and 30th April 2021 due to the coronavirus pandemic, and you’re eligible, you can now claim support.
To apply, you’ll need your:
- National Insurance number
- Government Gateway user ID and password
- Unique Taxpayer Reference (UTR) number
- UK bank details, including account number, sort code, and name and address linked to the account
This fourth instalment of SEISS closes on 1st June 2021. To determine your eligibility, HMRC first reviews your 2019/20 tax return. Your trading profits must be no more than £50,000 and account for more than 50% of your taxable income.
Changes to grant 5
The eligibility criteria for the fifth grant will be different. As it stands, the amount you receive will be dependent on your turnover between April 2020 and April 2021.
In effect, this means you may receive support if your sales have fallen by:
- 30% or more – In which case, the fifth grant will be 80% of three months’ average profits (up to a maximum claim of £7,500)
- Less than 30% – In which case, the fifth grant will be 30% of three months’ average profits (up to a maximum claim of £2,850)
This fifth and final instalment of self-employed support is expected to ‘cover’ the period from May 2021 to September 2021.
Declaring grants 1, 2 and 3 on your tax return
You won’t need to repay your SEISS grant, but they are subject to Income Tax and Class 4 National Insurance contributions. This means that, if you claimed grants 1, 2 or 3, they will need to be reported, in full, in your 2020/21 Self Assessment tax return.
HMRC is making this easier for users by including a box on the 2020/21 and 2021/22 tax return forms. You’ll need to include a 4th or 5th grant on the latter tax return should you claim them in 2021.
Alternatively, you can easily declare that you’ve received support through tax return software. Platforms like GoSimpleTax include this as a simple drop-down field.
If you discover that you received a SEISS grant that you were not entitled to, or were paid more than you should have been, notify HMRC within 90 days to arrange repayment. Fail to do so, and you may be charged a penalty.
Provided you have claimed the correct amount and include all grants within your Self Assessment tax return, you should stay on the right side of the taxman.
About GoSimpleTax
Income, expenses and tax submission all in one. GoSimpleTax will provide you with tips that could save you money on allowances and expenses you might have missed.
The software submits directly to HMRC and is the solution for the self-employed, sole traders and anyone with income outside of PAYE to file their self-assessment giving hints and tips on savings along the way. GoSimpleTax does all the calculations for you saving you ££’s on an accountant. Available on desktop or mobile application.
Try for free – Add up to five income and expense transactions per month and see your tax liability in real time – at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading and HMRC direct submission.
The First 5 Steps To Self-Employment Guide
For many people, becoming their own boss is the dream. They get to work in an industry they love, choosing their own clients and – better yet – their own hours. The only problem is that becoming self-employed isn’t that straightforward. At least, not on the surface.
After all, having to evaluate your income and manage your own tax affairs can be daunting. That’s why we’ve asked Mike Parkes from GoSimpleTax to help set your mind at ease, by providing his first five steps to self-employment.
1. Register as self-employed
First things first, you need to let HMRC know that you’ll be paying your own Income Tax and National Insurance contributions (NICs) moving forward. You’ll need to do this as soon as possible – no later than the 5th October after the end of the tax year in which you first became self-employed. So, if you become self-employed between 6th April 2021 and 5th April 2022, you have until 5th October 2022.
It’s a relatively simple process though. All you need to do is register on the GOV.UK website, or fill in an on-screen form to then post to HMRC. Once they receive this, they’ll post your 10-digit Unique Taxpayer Reference (UTR) number within 10 working days. You’ll need your UTR to access your Self Assessment account, which allows you to submit your tax return.
Because of the length of time it takes for your UTR to arrive, I’d suggest that you don’t wait until the last minute to register. Doing so may mean you miss the deadline to file your first tax return, which can land you an immediate £100 fine from HMRC.
2. Get to grips with your tax bill
Next, it’s time to understand what tax you’ll be responsible for paying. First is your Income Tax, which is determined by your taxable income (that is, your earnings minus any allowable expenses and deductions). HMRC takes this information from your Self Assessment tax return and calculates your tax bill accordingly.
The amount of National Insurance you pay also depends on your taxable profit (income less expenses). Instead of the Class 1 NICs that employed people make, you’ll pay Class 2 (unless you earn less than £6,515 a year) and 4 (if you earn profits over £9,569 a year).
Class 2 and 4 NIC rates for the 2021/22 tax year are:
| Class | Rate |
| Class 2 | £3.05 a week |
| Class 4 | 9% on profits between £9,569 and £50,2702% on profits over £50,270 |
3. Choose the correct insurance cover
This largely depends on which industry you’re in, but there are some general policies that all sole traders should consider. For example, if you employ another person, even if it is just part-time support to help complete projects, you are legally obliged to take out employers’ liability insurance. There is a significant fine for sole traders caught failing to have this.
You should also consider taking out public liability insurance. This protects your business should a client, customer or member of the public decide to take legal action. In the event that they suffer an injury at your premises, or you suffer an injury at their premises, it would also provide cover for damage to property.
Finally, you should consider insuring yourself for professional indemnity. This is where you protect yourself from a client lawsuit levelled at you on account of them being unhappy with the work you have done or the support you’ve provided.
We would always advise that you seek specialist advice from a suitably qualified insurance broker to discuss your requirements.
4. Identify any relevant tax relief in your line of work
Now you’re square with HMRC, and you’ve covered yourself legally, it’s time to enjoy the benefits of self-employment. All sole traders are eligible to claim relevant expenses to reduce their profits – and the lower the profits, the lower your tax bill will be.
This could include mileage for your car if you travel for work, training courses that help improve your knowledge or skill, or even a new computer that you use just for admin purposes. The only condition is that you use the purchase for business reasons only.
After you’ve incurred the expenses, and inputted the total amount on the relevant tax return, just be sure to store the receipts somewhere secure should HMRC request them. Software like GoSimpleTax makes this easy, by allowing you to take a picture of receipts and save them together with invoices and bank statements in the cloud.
5. Record income and expenses for your first tax return
A large number of sole traders log their income and expenditure towards the end of the tax year, causing unnecessary stress and a much longer tax return submission process. However, with real-time record-keeping, you can input this information throughout the year. This enables you to forecast your tax bill and better manage your cash flow.
Again, with Self Assessment software, this takes no time at all. Platforms like ours can give you an always up-to-date overview of your tax bill, which can help guide any business decisions you make. In fact, by seeing how much you owe well ahead of the Self Assessment payment deadline (31st January), you’re able to take the time to see if you have any expenses you might have missed or forgot about that may qualify for tax relief.
In order to be successful as a sole trader, you need to be maximising your take-home pay and steering clear of HMRC penalties. By following the above steps, you achieve both. So, are you ready to finally become your own boss?
About GoSimpleTax
GoSimpleTax software submits directly to HMRC and is the solution for the self-employed sole traders and freelancers alike to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.
Get started today, it is free to try – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.
Quirky Workplace Updates for 2021
If you’re ever going to get anything done, your workplace has to be an enjoyable place to be. Yes, it’s ideal if the space looks professional and inspires productivity, but there are ways to achieve this that still establish a pleasant atmosphere.
Don’t worry if you don’t know the first thing about interior decorating because all the quirky workplace updates you need are right here. By including these in your office décor, work should become that little bit less stressful.
Bring In Bursts Of Colour
How many workplaces have you seen which think white, grey, brown, and black are the only colours in the world? Offices around the world seem to be obsessed with these colours, and it’s understandable why. After all, they go together well to create a chic look that screams professionalism. However, they’re also a little dull.
If you want your workplace to be fun while still promoting productivity, you need to start decorating with these colours. They’ll brighten up the office and stimulate (or relax) the mind. Too many dark and pale tones can really sap the life out of a room, so introducing more reds, blues, and yellows can work wonders for your business.
Use A Peg Letter Board
The average workday is filled with all manner of appointments and reminders. Keeping track of everything can be challenging when you’re busy, but you can’t afford to let anything slip through the cracks. That’s why you need somewhere to keep all this essential information.
Perhaps you could do this with a peg letter board. They’re perfect for noting down important reminders in a way that’s fun and eye-catching for the office setting. Plus, if you buy one through Discount Displays, you have the option of choosing between five different sizes. That means you can tailor your purchase to however much or little you need to keep track of.
Put Mirrors Here And There
Plenty of offices have lots of windows and glass walls to make the space feel more bright and open. How many do you know that use mirrors for this purpose, though?
As a design idea, it’s not incorporated that often, even though it serves the same purpose. After all, the more mirrored surfaces there are, the more natural light that gets bounced around, which should have a positive impact on productivity.
You can get mirrors in various shapes, sizes, and styles, so you can make these decorations as quirky as you like. Maybe throw some funhouse mirrors into the mix to catch people by surprise and add a little laughter into the workplace environment. Nothing makes work more enjoyable than being in a good mood.
No one ever said that offices have to be boring if you want to get work done. You can be just as productive (sometimes even more so) in a fun and colourful environment as you can in one that’s chic and professional. So, rather than trying to get work done somewhere that bores you to tears, bring in these updates and start enjoying yourself more.
How To Get Ready For The New Tax Year
The UK tax year starts on 6th April and runs to 5th April the following year. It’s the perfect opportunity to reflect on the previous tax year, wise up on any new legislation that might affect your tax return, and look for opportunities to simplify the process and even reduce your tax bill where possible.
Not sure where to start? Not a problem. We’ve asked Mike Parkes from GoSimpleTax to give his best tips on preparing for a new tax year.
Digitalise the tax return process
If you’re still working with paper, let 2021/22 be the tax year you move online. After all, paper tax returns need to be filed three months before the online one, and they’ll be phased out in a few years as part of Making Tax Digital (MTD) anyway. So, why not make the change now?
MTD is an initiative launched by HMRC to make it easier for the self-employed to keep on top of their tax affairs. From April 2023, they want all sole traders to submit their self-employed income and expenses online and on a quarterly basis.
What’s more, moving online can often remove some of the time, stress and mistakes that usually come with a paper tax return. There’s even dedicated tax return software, like GoSimpleTax, that’s designed to make it much easier to log income and expenditure throughout the year, and then submit this information straight to HMRC.
Record income through invoicing software
Once you’ve moved your tax return online, whether that’s through software or HMRC’s Government Gateway, start requesting payment digitally with invoicing technology.
Invoicing tech formalises your payment process. Instead of sending over Word or Excel invoices, this software can send fully branded requests to your clients. They can also integrate with things like your Gmail account or your preferred payment solution, such as PayPal or SumUp.
Plan ahead to reduce your tax bill
The moment that the new tax year starts, you’re free to file last year’s tax return. My advice is not to wait, as tempting as it might be! This is the point where all your income and expenditure is fresh in your mind, so it’s far easier to collect up all the evidence and use it to submit an accurate tax return.
Filing a tax return early doesn’t mean you’ll have to pay your tax bill early, remember. It just means that you’ll get your bill almost a year in advance of its due date so that you can better manage your cash flow.
Even starting to complete one early has its benefits. It gives you time to review your expenses and find opportunities to make tax savings. You can save a fortune by identifying purchases that are classed as allowable expenditure, so why not give yourself time to check?
If you take these three key steps, you’ll be in a great position to file your tax return as soon as the new tax year starts – and then you can get back to doing what you do best.
About GoSimpleTax
GoSimpleTax software submits directly to HMRC and is the solution for self-employed sole traders and anyone with income outside of PAYE to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.
Try for free – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.
PDA members receive a 30% discount off GoSimpleTax.
The budget 2021 – self-employed what does it mean for you?
Chancellor Rishi Sunak yesterday unveiled the nations finance plan in the Budget 2021. GoSimpleTax take a look at what this means for the self-employed.
Key announcements
- Two further SEISS grants will be paid to the self-employed in 2021;
- 600,000 of the newly self-employed will become eligible for the SEISS grants;
- The furlough scheme is to be extended until the end of September; employers will have to contribute 10% in July and 20% in August and September;
- The £20 uplift in Universal Credit will be extended for another six months;
- VAT for hospitality firms will remain at 5% until September, followed by an interim rate of 12.5% for six months;
- The business rates holiday has been extended until June and business rates will then be discounted for nine months;
- Non-essential retail businesses are to get re-opening grants of up to £6,000 per premises;
- Hospitality and leisure businesses (that are set to open later) will be eligible for grants worth up to £18,000.
Mike Parkes, a Director at GoSimpleTax had this to say.
‘As expected, SEISS grant four was confirmed, topped up by SEISS grant five that will run until September 2021. To apply the self-employed must have filed their 2019/20 no later than the 2 March 2021. Whilst there are no increases to income tax rates, from April 2022 the personal tax allowances and bands will be frozen until 2026.’
SEISS fourth and fifth grant
‘At the Budget it was confirmed that the fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged.’ HMRC continue to say,
‘Your eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant which could be higher or lower than previous grants you may have received.’ You can read more on the fourth and fifth grant here via .Gov
About GoSimpleTax
GoSimpleTax software submits directly to HMRC and is the solution for self-employed sole traders and anyone with income outside of PAYE to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.
Try for free – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.
2020 in review, important changes to be aware of and what we can expect in 2021
As the pandemic continues to impact our way of life, it’s never been so important to manage finances and plan ahead. Understanding the latest tax changes and how they will affect you can be hard to get your head around, especially with everything going on.
One change that self-employed taxpayers had to keep on top of was the Self-Employment Income Support Scheme (SEISS), as there was different criteria for each grant that you could claim.
There were also further changes when HMRC waived the late filing penalties relating to the 19/20 self-assessment tax return, this gave breathing space to 1.8 million individuals who did not submit their tax return by the 31st January deadline.
We appreciate that it’s difficult to stay on top of tax law at a time of such uncertainty. That’s why we’ve asked Mike Parkes from GoSimpleTax to break down the biggest support package of 2020, and how it could impact you in 2021.
INsiders receive a 10% discount off GoSimpleTax – Get started today and your discount code will be emailed to you.
The introduction of the Self-Employment Income Support Scheme (SEISS)
On 26th March 2020, Rishi Sunak announced that the government would support self-employed workers in the form of a grant worth 80% of their profits for a period of three months. This was capped at £2,500 and applications were closed on 13th July 2020.
To qualify, you had to meet a number of requirements. Firstly, more than half of your income had to come from self-employment. Secondly, to protect against fraud, you had to already be self-employed and have submitted your tax return for 2018/19 before the 31st January 2020 deadline. This enabled HMRC to calculate the grant payment due if you were eligible.
On 29th May 2020, SEISS was extended by a further three months, allowing those previously eligible to claim a second grant. This instalment was worth 70% of average monthly trading profits, paid out in a single sum covering three months’ worth of profits and capped at £6,570 in total.
The third grant, announced on 24th September 2020, covered the three month period from 1st November 2020 until 29th January 2021. This was worth 80% of average monthly trading profits and paid like before. The fourth is set to cover the next three-month period, from the start of February until the end of April. However, the level of support available will not be published until the Spring Budget, which takes place on 3rd March 2021.
Whilst the support from the government has been welcomed with open arms, by most, it is worth noting that these grants are taxable. Each grant should be reported on your tax return, as income, in the accounting period they were received. This means there may be tax and NIC due on these payments and therefore it may impact your tax liability due 31 January 2022.
The extension of the Self-Assessment filing deadline
If this wasn’t enough, sole traders were also made exempt from a late filing penalty, provided that they filed online by 28th February 2021. However, this has proved somewhat confusing as self-employed individuals were still expected to pay their tax bill by 31st January.
Any individuals that failed to do so would be charged interest from 1st February on any late payments. This became even more costly if you delayed your payment on account from July 2020 (another COVID-19 response measure), as the two payments were both due on 31st January 2021 and each accrued interest.
Important change to be aware of
In a further curveball announced 19th February HMRC confirmed that the initial 5% late payment penalty on self-assessed tax would not be charged as long as the tax is paid, or a time to pay arrangement is agreed by 1stApril 2021. The self-assessment timeline is now
- 31 January – Normal Self-Assessment deadline (paying and filing)
- 1 February – interest accrues on any outstanding tax bills
- 28 February – last date to file any late tax returns to avoid a late filing penalty
- 1 April – last date to pay any outstanding tax or make a Time to Pay arrangement, to avoid a late payment surcharge
- 1 April – last date to set up a self-serve Time to Pay arrangement online
If you’re unable to pay your tax bill in time, the government is advising you to pay in instalments. This enables you to spread the cost of your tax bill over a few months. Bear in mind that you must owe £30,000 or less and have no other payment plans or debts with HMRC. Your tax returns must be up to date, and you also have to sign up before 1st April 2021. It’s worth noting that you’ll have to pay interest too.
As there is currently no information concerning the rules for the fourth SEISS grant, we here at GoSimpleTax are urging all our users to submit their tax return immediately. After all, there’s a strong possibility that they could determine your eligibility, and you must do it in order to set up a payment plan.
How taxpayers might pay for the support
Of course, to reap back the money spent on this support, it’s expected that the government will need to introduce significant tax measures. While it has already been suggested that the Chancellor won’t want to introduce any that will impact spending, rumours of changes to National Insurance, fuel duty and pension relief have all continued to circulate.
A new tax aimed at online sellers has also made many prediction lists in the run-up to the Spring Budget. Some of these sellers have seen an increase in demand over the pandemic compared to the high street. By introducing new charges, the government may hope to redress the balance.
In the meantime, it’s important that all Self-Assessment users keep a keen eye on the latest support. While filing your tax return may help secure your eligibility, there’s no guarantee that you’ll still qualify despite claiming the previous three grants. Keeping yourself well informed will help you to know where you stand.
About GoSimpleTax
GoSimpleTax software submits directly to HMRC and is the solution for self-employed, sole traders, freelancers and anyone with income outside of PAYE to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.
Try today for free – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.