Update January 2023: Making Tax Digital MTD for income tax has been delayed by two years until April 2026.
As the new tax year for 2022 gets under way there are increasing living costs, hikes in NIC and the uncertainty of future increases. That’s why it is more important than ever to complete your 21/22 tax return now! Knowing your tax owed will allow you to better plan and budget for the year ahead.
Filing now does not mean you pay early, your tax owed will still be due on 31st January 2023.
Using digital software to check and file your tax owed is quick and simple, let’s have a look at that along with why else filing digitally in 2022 is a great idea.
Enhance security
Tax return software allows you to log all income and expenses in the system. That means no more hoarding scraps of paper – instead, you can take photos of your expenditure and you can upload it to the cloud, where it’s secure and less likely to be stolen.
Record income more easily
You can use digital tools to understand when to schedule sending invoices as well as the follow-up emails to ensure that customers pay on time. Integrations with online payment solutions like SumUp and PayPal can additionally help your customers pay you more quickly using a debit or credit card, saving you from chasing payments in the first place.
Each of these payments will then filter into your tax returns, making the 31st January tax return deadline much easier.
By using software to request payment, any invoices paid will automatically update your accounts. For example, if you receive a payment for an invoice you sent, your predicted tax bill will be automatically updated based on the amount of that payment. This saves you time and also unifies two of your businesses most important admin tasks: invoicing and the tax return.
Real-time answers and advice
Paper, by nature, is chaotic. You’ll need to file and accurately record your accounts – up to six years of your accounts, in fact, to ensure that you are covered if HMRC launch an investigation into your tax return. That’s sure to take up a lot of space, and it also doesn’t provide you with an easy-to-access overview of what you owe the taxman.
Digital files, on the other hand, are much easier to read. Plus, as some tax return software providers also highlight any opportunities to claim tax relief, there’s an extra incentive for you to stay on top of your record-keeping.
Be MTD-ready
The self-employed and Landlords with annual business or property income of more than £10,000 must follow MTD for Income Tax rules from their next accounting period – starting on or after 6 April 2024.
You’ll still need to send HMRC a Self Assessment tax return for the tax year before you signed up for MTD for Income Tax. But after that, you can wave goodbye to completing an annual Self Assessment tax return and all the hassle and panic that can go with it. Having to record your expenses every quarter might also prevent you from forgetting and not claiming some.
About GoSimpleTax
GoSimpleTax software submits directly to HMRC and is the solution for non-residency returns, self-employed, sole traders, freelancers and anyone with income outside of PAYE to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.
Try today for free – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.