The FreeAgent Blog

With the 31st January deadline looming you really should be thinking about completing your 2017/18 Self Assessment tax return soon. To help you prepare and save some time, here’s a list of everything that you’ll need to have to hand before you get started.

Unique Taxpayer Reference (UTR)

When you first register for Self Assessment, or when you set up a limited company, you’ll receive a unique UTR number. It’s the 10-digit code you’ll see any letters from HMRC, such as your Notice to Complete a Tax Return.

Government Gateway ID

When you register for Self Assessment you’ll also receive a 12-digit Government Gateway ID, also called your User ID. Keep this safe! If you lose it it can take a while to receive a new one and you’ll need it to access your HMRC online account.

Activation code (for your first Self Assessment)

If this is your first Self Assessment you’ll have received an activation code in the post shortly after you set up your HMRC tax account online using your Government Gateway ID. You need to enter this code in order to complete registration for Self Assessment, get access to your tax account and to file your tax return online.

Be aware that the deadline for registration was last October so if you still need to do this, you’d better hurry! It can take a while for HMRC to send out the relevant information, especially after the registration deadline.

If you filed a tax return last year then don’t worry, HMRC will already be expecting another one from you this year (unless they’ve sent you a letter advising you they don’t want one) and your account will still be active.

National Insurance number

Your National Insurance number is used to record any tax or National Insurance Contributions (NICs) against your name. You can find it on most letters about tax, pensions or benefits and on any payslips or P60s from previous or current employers.

Invoices

If you’re a sole trader or partner in a partnership or LLP, you need to add up all your invoices to calculate your income for the year.

Unless you’re using the cash basis of accounting, remember that you pay tax when you issue an invoice, not when you receive payment. If you issued an invoice in the 2017/18 tax year that wasn’t paid until the 2018/19 tax year, you should still include this amount in your 2017/18 Self Assessment.

Income from other jobs (dig out your P60!)

If you were paid a salary by another employer in the 2017/18 tax year you need to know how much you received, how much was taxed at source and the employer’s PAYE tax reference. These figures can all be found on your P60 so make sure you have this form to hand.

If you received any benefits from your employer in addition to your salary, including expenses that were paid back to you, you also need to enter these figures. You can find this information on your P11D form.

Salary

If you’re a limited company director, you need to know how much salary was due to you from your business in the 2017/18 tax year. Bear in mind that you must pay tax on any salary that was due in the tax year, regardless of whether it was actually paid.

Dividends

For limited company directors who declared dividends between 6th April 2017 and 5th April 2018, you need to include this information on your tax return – even if the dividend wasn’t paid until after the end of the tax year.

You also need to declare dividends payments received in the tax year from companies other than your own.

If you’ve received dividends from a company outside the UK that amount to more than £300, this information needs to go in the “foreign income” section of your tax return.

Bank interest

You need to declare any interest received from bank accounts, so you’ll need to collect all of your bank interest certificates ahead of time.

Exceptions to this are interest from ISAs, which are tax-free accounts, and interest on a limited company’s business account, which will be declared on the company’s Corporation Tax return.

If your bank account is a joint account you only need to declare half of the interest received in the tax year.

Income from rental properties

If you’ve received income from renting out a property, you need to include this as part of your your tax calculation.

Income from trusts

Similarly, you need to declare income from trusts in order to pay the correct amount of tax.

Expenses

Your allowable expenses for the year can be used to reduce your tax bill if you’re a sole trader or in partnership. Find out what you can claim in our A-Z guide of expenses.

Pensions and benefits

You need to declare your overall income from the State Pension and any private pensions if you have received any payments. If you have a private pension, your pension provider will usually tax the payments before they pay them out and send you a P60 detailing the amounts that were deducted.

You also need to declare any state benefits you’ve received, such as Job Seekers Allowance (JSA) and Incapacity Benefit.

Student loan repayments

For student loans, you need to know what plan you’re on and how much of the loan you repaid in the tax year. Check this guide to paying back your student loan when you’re self employed to find out more.

Donations to charities under Gift Aid

Donations you make under Gift Aid are eligible for tax relief. You can even claim relief on donations you’ve made after the end of the tax year up to the date you send your return - but only if you submit your return by the 31st January deadline.

Time to get going!

That’s a long list of things you need to sort so you’d better get started before it’s too late! For more information on completing your 2017/18 Self Assessment tax return, download our complete Self Assessment checklist.

If you’re already using FreeAgent, a lot of the information needed to complete your tax return will be ready and waiting in your account from data you’ve entered throughout the year. When you come to file as a sole trader, up to 90% of the Self Employment form will already be filled in! If you’re a sole trader or a director of limited company you can also submit your tax return directly to HMRC from the app.

Try FreeAgent free for 30 days and save yourself from stress this Self Assessment season.

Already using FreeAgent? Refer a friend and you both get 10% off your subscription – find out more about our referral scheme.

Here at FreeAgent, we know that one of the biggest issues for small businesses is getting paid and maintaining a healthy cash flow.

Every year around half of the invoices sent by small businesses get paid late, meaning that some people are waiting months - or even years - to receive money they’re owed. In a survey that we conducted last year, one in ten small business owners told us that they’d had the horrible experience of a client never paying them at all*.

We’re passionate about helping our customers tackle this problem. We introduced late payment Insights into our software last year to allow our customers to identify clients who regularly settle their invoices late. Now we’re excited to unveil another big step on our mission to make late and non-payment a thing of the past.

We’ve teamed up with our friends at Nimbla, a company that helps small business owners by checking their clients’ credit reliability and offering insurance against invoices that are deemed to be at risk as a result of a client’s bankruptcy or insolvency.

If you’re a FreeAgent customer you can now link your account to Nimbla to get an instant review of the potential credit risk posed by your late-paying clients, and then decide whether to insure yourself against any outstanding invoices.

It’s a really exciting partnership for us and one that we hope will help to protect our customers from the risk of non-payment and keep their cash flow healthy. You can find out more about Nimbla and sign up for a free account here

*Survey of UK small business owners conducted in spring 2018 with 594 total respondents.

It’s the most wonderful time of the year! The life of a small business owner can be demanding and a relaxing holiday season surrounded by friends and family could give you the breathing space you need after a hard year’s work. But before you take that well-deserved break, a little bit of pre-Christmas admin can go a long way! These five tips are designed to help you finish up 2018 in style and give your business a flying start in 2019.

1. Let clients know your availability if you're planning to take time off

If you want to have a proper holiday over the festive season, the last thing you need is a stream of emails and phone calls flying in while you’re trying to relax! Make sure you give your clients, suppliers and anyone else who may need to contact you plenty of warning before you down tools. Whether you set an out-of-office message on your email and phone or contact people individually, you’ll be far less likely to receive an unexpected call over your turkey dinner if you let everyone you work with know your availability.

2. Chase remaining invoices to get paid before Christmas!

If you’re planning on taking time off at Christmas, it’s highly likely that your clients will be doing so too - and that’s not great news if you’re still waiting to be paid! If clients are dashing to get everything done before the holidays start, they might overlook the outstanding invoice on their desk, which means that it could be well into the new year before they finally get round to paying you.

Start chasing these invoices now to make sure you get the money you’re owed before the festive break starts. If necessary, get on the phone and request payment in person but if you’re not comfortable having an awkward conversation about money at this time of year, FreeAgent’s invoice reminders which will automatically email clients and request payment for you! Find out more about invoicing in FreeAgent.

3. Set some goals for 2019

The run-up to Christmas isn’t just a great time to prepare for some much-needed downtime, it’s also a chance to get your business set for the year ahead. So, in addition to getting the last bits of work done before the holidays, why not carve some time out to set yourself a few 2019 goals?

Think about what you want to achieve once the new year gets underway. There might be a new business opportunity that you’ve always wanted to try, a new direction you’ve considered taking your business in, or you might just want to get more organised with your admin! Make a list now and start thinking about how you can turn those goals into realities when you return to work after the holidays.

4. Make a plan for January to get the new year off to a great start

If you really want to hit the ground running when you return to work, consider making a plan for January before you down tools in December. Unlike your aspirational goals for 2019, these should be specific tasks for you to complete when you’re back at your desk.

For example, you may want to get your tax affairs in order or tidy up all of those important documents you need to file. Or maybe you could finally set up that new business bank account you’ve been considering for the past few months? Whatever your plans are, write them down and leave them somewhere handy to give yourself a really productive return to work in January.

5. Make a start on your Self Assessment- or maybe even file it!

Even the most relaxing of festive breaks can be overshadowed by the looming spectre of Self Assessment season. So if you don’t fancy another stressful January where you’re racing against time to log your expenses, dig through your finances and get your tax return filed before the 31st January deadline, why not take some time now to get it out of the way?

Take a look at our Self Assessment guides to see what information you need and then make a start on gathering the data and filling out the necessary sections of your tax return. You might even find you can file it early! That way, you’ll be able to spend more time on your business once January gets underway.

The festive season is just starting, but here at FreeAgent Towers Christmas has come a little early this year. Over the past week or two we’ve been dusting off our posh frocks and joining in the revelry at some fairly prestigious parties - where we’ve scooped some shiny new trophies to deck our halls with!

Last week, FreeAgent was named “best new innovation in solving problems for small businesses using account aggregation” at the Financial Data and Technology Association (FDATA) 2018 Open Banking Awards, which recognise the many innovative ways UK companies are using Open Banking to help their customers. Ever since we received our Account Information Services Provider (AISP) registration from the Financial Conduct Authority earlier this year, we’ve been working hard on bringing Open Banking into FreeAgent, so we were honoured to receive this recognition.

But that’s not all! We also had a successful night at the recent 2018 Computing Technology Product Awards in London, where we we were named Best Business Software Provider. And earlier this month, our co-founder Ed Molyneux was delighted to be crowned CEO of the Year at the Scottish Tech Startup Awards.

2019 is gearing up to be an even bigger year for FreeAgent - so watch this space! In the meantime, why not learn more about our award-winning accounting software