As a self-employed business owner, you are in charge of filing your own tax returns. It is a time of year dreaded by most, but if you keep well-informed and organised, you can maintain a calm approach to this usually hectic period.
What do I need to do?
After registering your company with Revenue, you are obliged to fill out a self-assessed tax return, or Form 11. Simply put, your tax return is used to declare the income you earn, and also to claim any tax allowances that can be offset against your tax bill.
When is my deadline?
Depending on whether you complete your tax return on paper or online, you must submit is by October 31st or November 14th respectively. Should you fail to complete your return by the required date, the Revenue Commissioners will impose penalties and interest; it is important to note that this interest is compiled on a daily basis, so don’t delay!
When filing your tax return, you have the opportunity to claim returns on some expenses made during the year. It is important to keep track of your spending throughout the year, not only to make your tax return easier, but to be prepared in the event of an audit. A general rule of thumb when tracking expenses is to hold on to records for up to six years. The information you should track includes:
- Mileage records
- Bank statements
- Receipts for purchases
There are, of course, restrictions on what you can claim. In order for an expense to be considered legitimate, it must be directly related to the running of the business. You must be ruthless when filling in expenses, including nothing that may have been used in personal time. Here are some examples of acceptable expenses:
- Utilities – rent, heat, lighting etc.
- Motoring expenses
- Travel expenses – From one work location to another (not a daily commute)
- Advertising costs
You should be careful to distinguish between life costs and work costs. Fortunately, the legislation has outlined exactly what will not be accepted as an expense. So should you be in any doubt about your claim, be sure to consult the guidelines here.
Tax returns can be a difficult and daunting task, hopefully with this helping hand you have the knowledge to complete your next one with confidence. If you are worried about your cash flow when filing your return, why not check out our finance options to provide you with a worry-free tax season.