These are few important questions, which must be answered in case you want to get out of any hassle with tax authorities. This post will touch upon few basics for setting your tax related affairs in proper order and help you to fill up your self-assessment form for tax return.

Selecting the proper form

For filling up your tax return form, you must first inform HM REVENUE & CUSTOMS (HMRC). You need to select the right form out of 2 forms

  • For newly self-employed register yourself online
  • Otherwise you will need form SA1

What next

You will get confirmation from HMRC and will be provided with unique taxpayer’s reference number. You must quote this reference number for any dealing with HMRC. They may ask you either this or the National Insurance numberfor claiming your mechanics tax rebate.

Submitting your tax return

By end of every tax year, submit your tax returns to HMRC by 31 October. Alternatively, if you file the return online, then by 31 January of tax year. If you fail to do that then will invite a fine of £100.

Paying tax due if any

If you owe any tax then make sure to pay by 31 January. You can pay tax to HMRC, by direct debit, online banking or through bank etc. You need to declare if your income has been taxed.

Again, if you delay in paying HMRC then it will attract interest or penalty for late payment.

Record-keeping

You must keep all your documents and records for 6 years as HMRC may want to examine any of them in future.

No special format is necessary for all your business records. You can also submit them online in excel sheet too.

Other income sources

In case you have any other income sources then all these must be maintained by you for following incomes:

  • Dividend vouchers
  • Bank interest certificates
  • Portfolio statements
  • P45s/P60s from pension
  • P9Ds/P11Ds from employers
  • Job Seeker’s Allowance notifications  
  • Pension being paid 
  • Receipts of donations
  • Assets you sold, e.g. shares, land etc.
  • Income from land or property

Claiming business expenses

Following are list of common expenses that motor mechanics may claim.

  • Replacement tools
  • Parts supplied
  • Insurance
  • Equipment repairs and maintenance
  • Protective clothing
  • Laundry and cleaning
  • Telephone for business purpose
  • Mobile Phone for business use
  • Trade magazines
  • Internet
  • Professional subscriptions
  • Postage & stationery
  • Advertising
  • Use of your home as office
  • Bank charges for business account
  • Computer consumables
  • Accountancy fees
  • Business loans interest
  • Wages
  • Fares and travelling expenses
  • Other sundry items
  • Subsistence

Vehicle running costs 

  • Repairs and maintenance
  • Fuel
  • Cleaning
  • Road tax/insurance and MOT
  • Parking & tolls

Capital allowances

Capital Allowances will be claimed for following assets that is used for business and work: 

  • Van
  • Car
  • Truck
  • Plant and equipment.

Use of home

In case you are working from home, then running costs of the home that include expense bills for:

  • Electricity
  • Gas
  • Telephone
  • Rent
  • Broadband
  • Mortgage interest
  • Council tax
  • Insurance

Family wages

If you have paid any wages to family members for doing any work for your business then HMRC will like to see the proof or receipt about the payment.

Make sure that you consider every wage rules.