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With the new tax year around the corner, it’s time to start getting into better habits to help ensure you only pay the tax that you owe and not a penny more. 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, we’re all 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. That £29 could be far better spent on new business cards or towards some specialist software or training for you or your employees. So, what can you do to be more receipt smart?
The new tax year begins on April 6th, 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 scans and uploads receipts as you receive them.
Apps like SimpleTax can help manage your receipts - even when you are on the go. All you have to do is take a picture with your phone – the application reads it, stores it, and updates your Self Assessment accordingly. It’s backed up on secure, encrypted cloud storage, accessible from any device.
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 £££. Consider everything: uniforms, hardware, office space, stationery and printing costs… there are dozens of avenues to a legal tax break, providing it helps your business succeed.
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.
SimpleTax, for instance, is officially recognised by HMRC, allowing direct submission of your tax return to their system.
Clever algorithms move with the speed of your cash flow, and you can scan relevant receipts and documents to make cross-checking your return simple. It’s a convenient method of getting your self assessment tax return on track and can help you make savings you didn’t even know were possible. So no more posting hundreds of receipts to your accountant to sort.
Created by Oldham-based software company GoSimple, the app is recognised by HMRC and is available across all devices. It charges £25 to enable users to file a tax return and makes personalised recommendations on the tax savings that users qualify for.
*The £29 figure is based on a self-employed person earning approx. £20k – if they lose £100 worth of expenses, this will result in £29 in reclaimable tax disappearing.