As a business leader, whether you’re a director, CEO, or entrepreneur, the self-assessment deadline can be an overwhelming period—especially with the myriad of tasks demanding your attention. Even if you have an accountant to support you through this process, there are still actions you need to take to ensure you meet deadlines, remain compliant, and minimise your tax liabilities. Whether you handle everything in-house or have an external tax accountant, preparing in advance can save you stress and help you avoid unnecessary penalties so here are our tips for self-assessment tax returns for business leaders.
Key Self-Assessment Deadlines to Keep in Mind
There are a few key self-assessment deadlines that you need to know.
- 5th October: If you’re a new business or need to register for self-assessment, this is the deadline to inform HMRC.
- 31st October: For paper tax returns, this is the final deadline for submission (though most will file online).
- 31st January: The critical date for filing online tax returns and paying any tax owed for the previous tax year. If you miss this, penalties will start accruing, which can be costly.
Self-Assessment Tips For Business Leaders with an Accountant
If you already have an accountant, great! They’ll handle much of the complex tax work for you, but there are still some steps you should take to ensure the process runs smoothly:
- Communicate Early: October is a busy time for accountants, so get in touch with them early to ensure they have all the information needed. Don’t wait until the last minute to provide essential documents or respond to queries.
- Provide Accurate Records: Ensure that your accounts are up to date. If you use a tool like Xero, make sure everything is reconciled and categorised correctly. Your accountant will need an accurate reflection of your income, expenses, and any other relevant financial transactions.
- Review Your Tax Position: Even with an accountant, take the time to understand your tax position. Ask questions about tax-saving opportunities, such as pension contributions or charitable donations, that you can take advantage of before the deadline.
- Plan for Payments: Although your accountant will calculate your tax liability, it’s up to you to ensure you have sufficient cash flow available to meet the 31st January payment deadline. Failing to do so could lead to interest charges and penalties.
Self-Assessment Tips For Business Leaders Without an Accountant
If you don’t have an accountant, the process requires more hands-on effort, but it’s still manageable with the right preparation. Here are some tips for self-assessment returns you need to know:
- Use Online Accounting Software: Tools like Xero or QuickBooks can make filing self-assessment easier by providing a clear overview of your finances. These platforms can help you generate the necessary reports and summaries needed for your tax return.
- Organise Your Documents: Gather all relevant financial information, including income statements, dividend vouchers, and any allowable expenses. If you run your business as a limited company, make sure you account for all director’s loans, salary, and dividends.
- Understand Your Allowances: Make sure you’re aware of all the available tax allowances and reliefs. For example, if you’ve invested in pensions or qualify for R&D tax relief, these could significantly reduce your tax liability.
- Seek Guidance from HMRC: While it might seem daunting to do everything on your own, HMRC provides detailed guidance on their website and even offers a self-assessment helpline if you need assistance.
Key Documents and Information to Submit On Your Self-Assessment
For directors and business leaders, the self-assessment submission will typically include the following:
- Your salary and any dividends received from the company.
- Income from other sources, such as rental properties, investments, or other business interests.
- Expenses that can be deducted from your income, such as business-related costs, allowable travel, and home office expenses.
- Pension contributions, including those made through your business or personally.
- Charitable donations that are eligible for Gift Aid.
If you’re unsure whether something should be included in your tax return, speak with your accountant or refer to HMRC’s detailed guidance.
Strategies to Minimise Your Tax Liability
Here are a few strategies business leaders can consider before the deadline to potentially minimise tax payments:
- Make Pension Contributions: Contributing to a pension scheme before the tax year-end can reduce your taxable income and provide long-term financial benefits. If your business offers a pension scheme, making additional contributions through your company can also offer corporation tax benefits.
- Maximise Allowable Expenses: Ensure that you’re claiming all legitimate business expenses. Common expenses for directors include travel, office costs, and professional fees. However, personal expenses must be carefully separated from business ones.
- Consider Charitable Donations: Donations made through Gift Aid can lower your tax bill, and your business can claim tax relief on these contributions as well. If you’ve made donations in the tax year, ensure they are included in your tax return.
- Review R&D Tax Credits: If your company engages in research and development activities, you may be eligible for R&D tax credits. This can provide significant tax relief for qualifying businesses. Consult with a specialist or accountant to see if this applies to your company.
- Utilise the Dividend Allowance: For directors of limited companies, dividends are often a tax-efficient way to withdraw profits. Make sure you’ve made use of your dividend allowance (£1,000 in 2024-25) to reduce your personal tax liability.
Actioning These Tips For Self-Assessment Preparation Before The Deadline
The self-assessment deadline doesn’t have to be a source of stress if you prepare in advance. Whether you have an accountant or not, being proactive will save you headaches down the line and ensure that you’re taking full advantage of tax-saving opportunities. Start early, gather the necessary information, and speak with professionals where needed to make the process as smooth as possible. Hopefully you found these tips for self-assessment useful!
If you’re looking for tailored support with your tax return, ways to reduce your tax bill or more tips for self-assessment, get in touch with the team at Ascentis today.