Tax matters are just one of many responsibilities held by HMRC. Residents of their United Kingdom have their own responsibilities to take care of, one of which is tax reporting. Although many employ someone else to take care of this for them, there is still the matter of providing that individual with the proper information to complete the tax. The following tips will help to ensure that you have all that you need when tax time comes.
Paper receipts used to make up the majority of HMRC related deduction paperwork, but today, most people make business related purchases with debit cards and credit cards. Although the purchases will show up on your statements, you may have completely forgotten about the transaction by the time it does. If you know that you will need to deduct certain business costs, it is best to use some type of software to keep track of these costs as they are paid for. Apps are also available, and will allow you to do this from a mobile device.
Despite technology, paper receipts do still exist, and you may need them come tax time. These can of course be saved in one location, and then handed over to your tax preparer. If you plan to complete HMRC tax preparation on your own, you may want to use the aforementioned software or app to keep track of the costs. Alternately, you can create your own spread sheet and save the costs as they occur, or even one a week or month. Any Excel spreadsheet can be customized for this purpose.
How do you know what to save? Reading over the list of deductions that HMRC provides will help. If you still have questions after reading the provided information, do not hesitate to contact HMRC for clarification. Deductions are not for business owners only. You may be able to deduct certain expenses even if your work alone as a freelancer. It is important to keep track of your income, both coming and going, as well as expenses. Doing so will ensure that you are in excellent shape when it comes time to file your report with HMRC.