As the curtain draws on 2018, there’s every reason to look back at what we’ve accomplished as plumbers and how it might be bettered. Aside from diet plans and the January gym membership, New Year’s resolutions can also extend to our finances… Dealing with taxes, for instance, doesn’t have to be a sore spot if we change how they’re tackled.
As you draft up those Resolutions, Plumbers be sure to include some of the following advice for making tax simpler, less time-consuming and easier on your wallet.
1. Ditch the accountant
In the past, an accountant was crucial to making your funds watertight. But now they’re becoming redundant, or at least overpriced (by and large) for the services they offer. Whereas an accountant would charge, on average, around £250 to complete your Self Assessment tax return, it’s now easy to do this yourself.
Digital software such as SimpleTax gives you an accurate picture of your income and expenditure, while guiding you on how your Self Assessment should be composed. Cost-wise, these tools start from as little as £25 for an annual subscription.
2. Understand what expenses you’re entitled to
Anyone who needs to complete a Self Assessment has the potential to shave hundreds of pounds off their tax bill by getting savvy on which expenses are eligible for relief with HMRC. There are countless costs that you can claim on, depending on the nature of your earnings. Tax software can help you identify allowable expenses, to ensure you don’t miss out.
3. Keep personal expenses separate
There are harsh penalties for anyone who mixes up eligible tax breaks with those outside of the boundaries. For this reason, it’s wise to keep your non-PAYE earnings and outgoings in a separate account to prevent confusion. That way, you won’t have to waste time sifting through bank statements to distinguish between personal and professional finances.
4. Say ‘goodbye’ to paper receipts
Don’t let scattered, laboriously compiled receipts cause headaches over the next 12 months. Going digital can help you track what you’re spending, store the evidence, and log this on your Self Assessment. The best tools are powered by the Cloud – this means you can use your smartphone or tablet to upload receipts from your camera. Make the New Year a time to banish the chance of losing, forgetting or mismanaging your expenses by recording them directly in your tax return.
5. Streamline your finances
We can’t avoid tax entirely, but we can look to reduce our taxable income. One example for those that trade via a limited company is splitting take-home pay between a wage and a dividend, although HMRC are seeking to reduce this benefit.
Plumbers also need to consider topping up your pension pot to reduce your tax bill; there are so many ways to streamline your earnings while staying on the right side of HMRC. It’s simply a case of knowing where to save.
The New Year brings taxpayers across the UK a chance to take a fresh look at their finances. By exploring the latest digital tricks for tax assistance, and growing your knowledge of where money can be saved, you can ensure that 2018 is the best year yet for plumbers.