Performers, calm those taxman nerves: self-assessment isn’t as painful as you think
It can give many actors and self-employed creatives that sinking feeling, but filing your tax return needn’t be a terrifying ordeal: 1tap can help banish the self-assessment blues and allow you to focus on your day job
We are firmly into that time of year when self-employed actors, musicians and performers begin to twitch, sweat and look increasingly nervous – and it’s not because of the hectic pantomime season… Oh no, it isn’t!
From the middle of October, the dreaded spectre of the January 31 self-assessment deadline begins to loom larger and larger, prompting short flurries of receipt hunting, agent statement scanning and general malaise!
The truth is, as with many things in life, planning and organisation is the key. The main reason most self-employed people fear their tax and self-assessment deadline is because they’ve spent the year sticking their head in the sand and avoiding the boring, repetitive paperwork. This leads to the realisation that they haven’t a clue what they owe the taxman – and that is when the panic really sets in.
Is it better not to know? Of course it isn’t! You are going to have to pay it anyway and you’ll also be fined an extra £100 on top of your tax bill for filing or paying your tax after Janaury 31.
So here are four key tips from 1tap to calm your self-assessment stage fright and ensure you are ready to file on time this year and pay less tax:
1. Register with HMRC
If you are new to being self-employed, you can avoid one of the biggest mistakes people make by registering with HM Revenue & Customs now to enable you to file your self-assessment online. Don’t be fooled here – unlike most online registrations, you don’t get instant access to your account. You will receive your username and password in separate letters by post and until you receive these, you won’t be able to file online. At the best of times, this process takes at least a week, but at the busiest time of the year for HMRC it can take much longer. Do it now to avoid problems later. If you already registered, make sure you know your log-in details because, again, you’ll have to wait to receive any reset information by post.
2. Pull together your business income
Assuming that you prepare your accounts to April 5 every year, you should include all of your business income from April 6, 2016 to April 5, 2017. Actors and performers tend to have quite a mix of income sources, so yours might include: income from your agent statements, from paid employment (if you have done PAYE work, make sure you get a P60 statement from the employer), from royalties and from other business activities (promo work or network selling, for example). Finally, make sure you record any foreign income (from touring shows, etc) separately as they may be taxed differently to your UK income.
3. Claim all your business expenses
If you are operating as a sole trader, making sure you claim all of your legitimate business expenses is the key to saving as much tax as possible. The tax you pay is based on the following formula:
Income – expenses = taxable amount
The more expenses you can offset against your income, the less tax you will pay – simple! So make sure you dig out as many receipts as you can from train tickets and hotel/digs receipts to the more unique expense that actors and performers are often able to claim: like theatre and cinema tickets, gym membership and props, for example. If you’ve got bags of loose receipts under your bed or spilling out of draws, you can use the 1tap receipts app to blast through your pile in a matter of minutes. Just lay them out on the floor or table, set the app to ‘multi expense mode’ and simply photograph every receipt. 1tap will extract all the data, automatically categorise them for HMRC and store them for six years (as required by law).
4. Don’t let it happen next year!
Just like Les Mis, self-assessment never seems to end! Believe it or not, you are already more than halfway through your next tax year (assuming that you prepare your accounts to April 5), so there is no time like the present to get on top and ahead of your admin by photographing all of this year’s receipts using the 1tap receipts mobile app so you are up to date and on track to avoid the pain of next year’s self-assessment deadline.
You can even email in electronic receipts like Uber rides and Amazon purchases and 1tap will deal with those for you too. And even better, 1tap has just launched the 1tap tax app, which allows you to record your income as well as expenses to give you a live prediction of your potential tax bill so you’ll not be caught out again. At last, a self-assessment story with a happy ending!
1tap was designed to help the growing number of self-employed professionals around the world.
“Our mission at 1tap is very simple: we want to make self-employment as easy as being employed,” says CEO Nicholas Bartlett. “That means a musician should be able to focus on making music and never worry about their accounting. With proven success in the UK, we are now taking this vision to the continent and beyond.”
Its premier product, 1tap receipts, makes it possible to turn a paper receipt into a tax-claimable business expense with just a single tap. It was developed using the most optimal solution provided by the current technologies and HMRC’s Making Tax Digital initiative. We are very proud to be a part of their ‘Record keeping and Simpler Income Tax applications/software’ list.
The 1tap receipts app is to be part of a wholesome 1tap solution, followed by the recently launched 1tap tax – an app created to allow users to have real-time information on their taxes: how much they owe, how much they will get back, and what they can and can’t claim. It uses similar features to 1tap receipts in that users can automatically extract their receipt and invoice data.