Member Article

The self-employed must beware the Taxman, says expert

Self-employed business people from across the North East should be cautious when filing in their tax returns, risking overpayment or the taxman’s wrath for failing to do so.

There has been a five percent increase in the number of self-employed workers in the North East, and for many the 31st January will be their first experience of a process which requires significant attention to detail.

However, as well as risking penalties for late returns, many firms will miss out on tax reliefs after leaving preparation to the last minute.

Start-up companies are given generous allowances, and it is even possible for individuals to claim back expenses which have occurred up to seven years before the business opens.
They are also able to offset losses in the first four years of business against their net income of the previous three tax years.

Stephen Hall, Tax Partner at Deloitte in Newcastle, said: “The government has introduced a number of measures to support entrepreneurs.

“As a result completing your tax return isn’t just about paying what you owe, it’s about making sure you claim the reliefs you’re entitled to.”

New rules for late returns this year mean individuals could still find themselves liable to a £100 penalty for late filing, even if they have no tax to pay or are owed tax.

“Managing cashflow is often one of the biggest challenges for businesses so seeking advice to ensure you are not paying too much tax can be a great investment.” He added.

“It’ll make those early years in business a little easier and help establish good accounting principles for the future.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .