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contractor tax tips for the self-assesment deadline

Contractor Tax Doesn’t Have to be Taxing

Contractor tax doesn’t have to be taxing

The deadline for filing paper self assessment tax returns is midnight on the 31st of October, and if you’re a limited company contractor, this can be an important date in your tax year. The last tax year started on the 6th of April 2015 and ended on the 5th of April 2016. You’ll get a penalty if you need to send a tax return and you miss the deadline for submitting it or paying your bill. So if you’re a limited company contractor who wants to avoid paying a penalty fee, read on for our tips on how to make your life a bit easier.

Gather your paperwork before starting

The type of paperwork you’ll need depends on your particular circumstances. HMRC will send you the sections of the form it thinks you need, but you should check you’ve been sent the correct ones. If you have other sources of income, you’ll need extra pages. Other records you may need to provide include your details of pay and the tax that’s been deducted, which can be in your P60 or P45, and a P11D or P9D detailing benefits and expenses. You’ll also need invoices or payment slips from clients, as well as proof of business expenses you are claiming for your contractor accounts.

New processes this year can make contractor tax easier next year

If you find yourself surrounded by shoeboxes full of receipts, despairing that you’ll ever make sense of your accounts, now is the time to put processes in place that will help you next year. Create a spreadsheet detailing your income and expenses and commit to updating it at least monthly. Sort out your filing system so that it’s easy to find the documents, such as credit card bills and bank statements that you’ll need to refer to. And if you’re panicking about not having enough money to pay your contractor tax, set up a separate savings account for your taxes and regularly deposit a portion of your earnings into it. This way at least next year will be much less stressful.

A contractor accountant can be money well spent

Self assessment can be complicated and time consuming for anyone, but especially so for limited company contractors. If you’d like to reduce the amount of administration you do and focus on your contracting work, we’d recommend using a specialist contractor accountant that has experience in dealing with contractors in your sector, as many high street accountants aren’t familiar with the particular needs of those operating through a personal service company.

If you’d like to hand your contractor tax paperwork to the experts so you can concentrate on your day job, contact us today. We can recommend contractor accounting specialists who know the needs of this unique market.