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10 ways save tax on your Self Assessment Tax Return

Looking at phone

It’s Self Assessment season, most people who are required to do self assessment will submit their returns in December and January.

You must always send a tax return if you’re:

  • a self-employed sole trader
  • a partner in a business partnership
  • a company director (unless it’s for a non-profit organisation, eg a charity, and you don’t get any pay or benefits, like travel expenses or a company car)
  1. Don’t miss the deadline of 31st January or you will get penalties and interest
  2. If you are new to Self Assessment makesure you get your HMRC log in details early and know your NI and UTR numbers otherwise you won’t be able to file online which could lead to penalties
  3. Claim all your expenses for example a self employed worker will claim for travel , protective clothing (PPE), home office expenses
  4. Don’t forget Pension Contributions if the tax hasn’t been claimed by your pension provider or you are a higher rate tax payer
  5. Don’t forget Donations to Charity if you are a higher rate tax payer
  6. Have you included out of pocket expenses for example parking
  7. If you are employee could you claim a tax allowance for clothing?
  8. Does your company pay mileage below the HMRC rates, you could claim a tax allowance on the difference
  9. Check you have all your motoring expenses included
  10. Makesure you have claimed all your costs on Buy to Let

What is the Foster Care Allowance?

Mother and daughter with piggy bank

All Foster Carers are classed as Self Employed and can choose whether to be taxed using one of two methods – the Simplified or Profit methods.

Simplified Method

This is the most common method.

Your ‘qualifying amount’ for a tax year consists of two parts:

  1. Your Annual Fixed Amount per household of £10,000
  2. Plus your Weekly/Part Week Amount of £200 (under 11 years old) or £250 (over 11 years old)

If your income exceeds this level under the Simplified Method your are taxed on the difference.

Profit Method

This method works best if you have high expenses, to use this method you need to keep detailed records of all your expenses including capital expenditure.

Using the Profit Method you don’t use the allowances but prepare detailed accounts on which you are taxed.

National Insurance

Foster Carers are subject to Class 2 and Class 4 National Insurance.

Further details are in HMRC Helpsheet 236

How did you get on with Self Assessment?


According to the Government

This year, a record-breaking 8.48 million returns were filed online, representing 84.5% of all returns received. This meant that, of the 10.74 million tax returns due for the tax year 2012 to 2013, 93.4% met the SA deadlines for paper and online filing.

On 31 January we saw a final rush to file, with 569,847 online returns coming in on time – the highest percentage ever recorded.  It shows that many of you and SA taxpayers now prefer to use our digital service, over paper.

How did you find self assessment, was it easy or nightmare?

Deadline to register for self assessment tax return is 5th October

You may never have worried about filling in a tax return before now. Unfortunately you could be in for a shock and a penalty if you fail to register a new source of income for the tax year ending April 2013. You have until October 5th to register any change in circumstances with HMRC. This is particularly likely to affect those employees with earnings over £50,000 still claiming child benefit.

So who needs to complete a tax return?

You need to complete a self assessment tax return if any of the following apply:

  • You are self-employed
  • You are a company director, unless it is a non-profit organisation and you don’t receive payments or benefits
  • You are a Minister of Religion of any faith
  • You are a Lloyds Name/Member
  • You have annual income over  £100,000
  • You are an employee/pensioner but have other taxable income
  • You are over £10,000 taxed income from savings/investments.
  • You have over £2,500 of untaxed savings/investments.
  • You have over £10,000 of property income before expenses or £2,500 property income after expenses
  • You earn over £50,000 and are still claiming child benefit.

A phone call to the HMRC self assessment helpline on 0300 200 3310 will enable you to beat the deadline and register for a tax return for your income source. But allow yourself plenty of time for the call. My phone call this morning to register for a tax return took 25 minutes to be connected to an HM Revenue & Customs Officer.

Helen Alexander ACMA

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