Sole Traders – How to prepare yourself for the New Tax Year 20/21
We’re getting closer to the 6th April. The new tax year is a chance to take stock and evaluate your current business processes. How can you save yourself time and money for the new tax year?
Our Self-Assessment expert and GoSimpleTax’s Technical Director, Mike Parkes, has a few suggestions to bear in mind as the 2019/20 tax year winds down.
Know every deadline in advance
To ensure nothing slips through the net, remember all of the following dates:
5th April 2020 Any PAYE tax refunds in the last five years have to be claimed the day before the new tax year.
31st May 2020 If you manage payroll, then employees require a copy of their P60s on this day at the latest.
31st July 2020 The second payment on account for the previous tax year’s Self Assessment is due.
31st October 2020 Paper Self Assessments must be completed, sent and received via post by this date.
31st January 2021 This is the deadline for online Self Assessments, either through software or HMRC’s own portal.
Additional dates for VAT Payments have to be made and processed in quarterly installments, one month and seven days after each period has ended.
Remember the incoming tax changes
The Conservatives have raised the thresholds for basic and higher rate Income Tax. 2019/20 is the first financial period in which the changes apply. The basic rate limit has gone up to £37,500, while the higher rate threshold has grown to £50,000. Your may see a small but noticeable impact on your Self Assessment tax bill.
Another big announcement is the fact you can only offset up to 50% of chargeable gains made from the sale of capital assets using carried-forward allowable losses. It’s called corporate capital loss restriction (CCLR) for Corporation Tax. Whilst this may not be relevant to you, it’s worth noting that the deduction allowance for sale remains at £5 million, after which the CCLR rule comes into effect.
Think ahead for Making Tax Digital
With MTD over the horizon using software now to record your income and expenses as you go will limit the time required when you come to file to HMRC.
About the Author
Mike Parkes, our Self-Assessment expert, also runs GoSimpleTax, an incredibly intuitive and inexpensive Tax app. GoSimpleTax can help you get ready for 20/21 for instance, it collects all of your key information as you find it, and adds it up. It has a direct link to HMRC’s web portal, making for a rapid Self-Assessment submission. No longer will you have a very tight window in which to get your tax affairs in order. The whole process is made so much less daunting with efficient tools at your fingertips.
Sample some of the software’s features for free today take your free trial, no credit card required.