Did you know that you can resubmit your previous year’s tax return if you want to make changes?
From the HMRC website:
“You can make a change to your tax return after you’ve filed it, for example because you made a mistake.”
Many freelancers and those who file taxes treat their Self Assessment submission as a ‘to do’ item. They don’t realise that just getting it done has consequences. The more time put into a submission helps decrease the final tax bill and save money.
Let’s walk through some of the biggest mistakes made by those who are filing their Self Assessment.
Not capturing all expenses
Depending on how you make money, there are rules about the types of expenses you can claim as a business expense. Each individual circumstance differs and the application of the rules often differ as well.
HMRC has specific rules and methods to determine the types of expenses that can be claimed. The best way to think about business expenses is to ask yourself three questions:
- Would I have made this expense if it wasn’t for my business?
- Did I receive any personal benefit from this expense?
- Can I break up this expense and say exactly which parts were for personal benefit and which parts were for my business? (more on this below)
If the answer to the first two questions is No, then you’re probably in a pretty good place to claim the expense.
If all else fails and you still question whether an expense can be claimed, you should consult with an accountant who can give you some guidance.
Quick self-promotion... Finmo helps you track income and expenses and at the end of the year, the Finmo questionnaire works within the scope of your unique circumstances to file your Self Assessment.Find out more
Using simplified expenses
Sometimes the simplest method is not the best method. Many accountants recommend using simplified expenses. While for some, this is the right decision, Finmo has seen instances where accountants use simplified expenses, not because it’s the best decision for the client, but because it’s the easiest and the least amount of work for the accountant.
What are Simplified Expenses? Simplified Expenses cut out time dealing with itemised expenses. This method gives you a flat amount of expenses (£1,000) and a flat calculation for ancillary expenses. Using this method is fast and ‘gets the job done’. However, depending on your circumstance, you could be paying HMRC much more than you would otherwise need to.
Simplified Expenses is often couched as the “safest” decision you can make. Fear of an audit is used to decrease the risk but also decrease the amount of work an accountant or bookeeper may need to do. Like any decision in life, you must make your own risk / benefit analysis. In many examples, the benefit part of the decision is left out and only the risks are highlighted.
Not capturing shared expenses like phone, home, mileage
Many expenses have both personal and business benefits. An example is your mobile bill. You may use your mobile for business and personal. The question comes as to how much of your mobile can be claimed for as a business expense versus not. This is called the dividing costs method.
We wrote a whole blog piece on this subject if you want to read more.
Expenses like your rent (or mortgage interest if you own your home), your cell phone, home bills (electricity, gas, etc.), and your vehicle costs can all be partially claimed if used personally and for business.
Process to resubmit
- If you submitted online, you need to login to HMRC using your Government Gateway user ID and password, find your tax return, amend it and resubmit it. HMRC website has more specific instructions.
- If you had an accountant submit your Self Assessment, you will need to contact them to discuss the process and costs to resubmit. You may need to make a decision whether the amount you’re saving makes up for the cost to resubmit.
- If you want a new accountant to submit your return, they will have to create a new return for you and include a letter to HMRC letting them know this is an updated return.
- If you mailed in your assessment, you would need to send HMRC the corrected pages. Write ‘amendment’ on each page, and include your name and Unique Taxpayer Reference (UTR) – this is on previous tax returns or letters from HMRC.
Tracking income and expenses
Finmo recognises that tracking your income and expenses throughout the year can be painful. This is why we created the solution in the first place. We know how tough it is and wrote about it so others could empathise with our pain.
- Connect your bank account
- Tag your income and expenses, and create rules
Should you resubmit?
Finmo’s experts are offering a limited time free review of your previously submitted Self Assessment. We will review what you submitted, ask you some questions and help you ascertain whether you should re-submit.
Send an e-mail to email@example.com if you want to understand more and get started.