How Tax Works For Self Assessment
The tax system is self assessment and it works like this:
Self Assessment means that each year you have to produce accounts, enter that information onto your tax return to 5 April each year and calculate the tax and national insurance owed. This tax return then has to be filed with HMRC, if you complete it electronically the deadline for this is 31st of January in the following year.
You do have to remember that at no stage has HMRC checked any of the information on your tax return or accounts.
HMRC can conduct tax enquiries and these can be at random at this stage they will ask to see all the books and records, receipts and bank statements used in the business. It’s only then would you discover that these items are not tax-deductible expenses and the tax that was paid in those years was not enough. This would trigger interest and penalties.
We work with our clients to ensure we claim the maximum amount of tax deductible expenses for clients that are allowable, we work to minimise your tax bill while we keep you on the right side of the tax laws