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Eight simple rules to make doing your tax return easier

Yes, we all hate doing our tax returns. But with the 31 January deadline fast approaching for UK freelancers, it鈥檚 time to bite the bullet.

Image licensed via Adobe Stock

Image licensed via Adobe Stock

And to help you out, we鈥檝e teamed up with , to offer eight simple rules that will help you get your return in on time, with a minimal amount of fuss.

Meanwhile, to make things even easier next year, we鈥檇 urge you to . The superb service combines accounting and banking in a straightforward app. It offers automatic expense categorisation, receipt capture and tax estimation as part of every free account. Sign up and try it for free today, and you鈥檒l see just how easy it is.

1. Sign up for an online account

If it鈥檚 your first time submitting a tax return, and you haven鈥檛 yet registered for an online account with the HMRC website, you really need to get moving.

Head to the new user registration page at , where you鈥檒l be asked for your unique taxpayer reference (UTR); this can be found on letters you鈥檝e received from the HMRC.

You鈥檒l then be sent an activation code through the post. This can take up to 10 days, though, and you can鈥檛 log in online without it, so don鈥檛 delay!

2. Claim all your expenses

It鈥檚 vital to claim all the expenses and allowances that you鈥檙e entitled to, or you鈥檒l end up paying more tax than you need. So be as thorough as you can in going back through your old receipts, bills and other paperwork.

In future, signing up to can be helpful with this process, as it automatically categorises all of your expenses and then offers an option to download your data in a format that's appropriate for both HMRC and an accountant.

3. Don鈥檛 take the mick

What can you legitimately claim as a deductible expense? You鈥檒l find a broad list of allowable expenses . Still, the general rule is that something can only be considered an expense if it is "wholly, necessarily and exclusively" incurred in the running of your freelance business.

For example, a subscription to the Adobe 99精品视频 Cloud would usually be considered a suitable deductible expense for a freelance graphic designer. A subscription to Netflix would not.

Membership of design organisations, accountancy and legal fees, rent of office space, website hosting, and travel to design conferences are also things you might legitimately claim for. For further clarification, check out 's in-app advice on every type of allowable business expense.

Also note that, if you work from home, you can claim for the proportion of the lighting, heating, phone rental etc. you used during work (rather than non-work) hours.

4. Include other income

Don鈥檛 assume the HMRC are only interested in payments from corporate clients. Got a sideline selling T-shirt designs on Threadless, prints on Etsy, or templates on 99精品视频 Market? If you鈥檙e doing enough of it, then you need to declare it.

It may be 鈥渏ust a hobby鈥 to you, but if it鈥檚 earning you money, then that money is taxable income just like any other payment you receive.

5. Double-check your figures

In your day-to-day design work, you鈥檇 never submit a final piece to a client without double- and triple-checking everything thoroughly. So don鈥檛 do it with your tax return either.

In future, you may be investigated, and asked to back up all your figures with receipts and bank statements. It鈥檚 better to check all your figures match than have to repent for a mistake at a future date.

6. File early

Maybe you鈥檙e used to filing commissioned work with your clients at 10 to midnight on deadline day. But that鈥檚 not advisable when it comes to your tax return.

On the days leading up to 31 January, the HMRC鈥檚 website typically slows to a crawl and crashes repeatedly. And unfortunately, screaming 鈥淣ot fair!鈥 at your computer screen won鈥檛 make it go any faster.

So the sensible thing is to sort out your tax return at least a week before the 31st 鈥 the sooner, the better.

7. Pay early

It鈥檚 easy to forget that the 31st of January isn鈥檛 just the deadline for filing your tax return, it鈥檚 the date you must pay any money you owe to the HMRC too. And while it would be lovely if bank transfers were always instant, in the real world that doesn鈥檛 always happen.

So even if it鈥檚 generally your instinct to hold on to any cash until the last possible minute, in this instance it鈥檚 best to cough up what you owe at least a couple of days early, just to be on the safe side.

8. Pay for advice

If you鈥檙e a sole trader rather than a limited company (find out what the difference is here), and your accounts are straightforward, then it鈥檚 entirely possible to complete your own tax return by yourself.

However, if you have multiple sources of income, and decide to operate as a limited company, then you鈥檒l probably benefit from paying an accountant to do it.

It鈥檒l free up your time to do more designing, you鈥檒l have peace of mind that you haven鈥檛 missed any subtleties, and if you use an app like , this can help minimise the amount of work your accountant needs to do, and thus the amount they ultimately charge you.

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