With the tax return due just a few weeks away, many of company owners are undoubtedly scrambling to collect all of their receipts and expenditures in order to drop them off at their accountant’s office.
If you keep paper records, below is a list of the documents your accountant will require to prepare your accounts and self-assessment tax return.
Most essential, keep in mind that the 2020-2021 tax return covers the tax year from April 6, 2020 to April 5, 2021. If your accounts have a 31st March year end, the period will be 1st April 2020 to 31st March 2021, or if you have a different year end, it will be 12 months to your accounting year end date that occurs in the above tax year. For example, if your fiscal year ends on December 31st, records from January 1st to December 31st, 2020, would be required.
Documents for your Tax Return
Job Income — If you have any employment income in addition to self-employment, you must produce your P60, or P45 if that employment income stopped during the year.
P11d – This is for any in-kind rewards you got from your job.
Dividends received during the year
Rental revenue and property management expenditures – Your accountant will want information about your rental income and property management expenses. If you have a letting agency, you will be expected to provide statements. In addition, your mortgage interest provides some further alleviation. The laws are complicated, and your accountant will be able to calculate how much tax relief you are entitled to on the interest and any mortgage arrangement costs paid.
Private pension payments — Include any payments paid, since they may qualify you for further tax relief.
Bank interest earned – Any interest earned throughout the fiscal year (excluding ISAs). HMRC is strengthening its ties with banks, so make sure you supply accurate numbers.
Any additional income or profits you got throughout the year. This may be from another self-employment job you have, or a chargeable gain from selling a rental property or some shares, for example.
Your tax return must include all of your income, so consult with your accountant if you have any questions.
Getting your financial affairs in order well in advance of the deadline also means you are far less likely to be hit with costly penalties or interest, either because the tax return was filed late, there was an error due to a rushed filing, or you did not have enough time to plan for payment of any tax liabilities.
Records for your accounts
Bank statements – For all of your company accounts and for the time period covered by your accounts. You’ll most likely have one primary account, but if you have a deposit or reserve account, include these statements as well. If you still use check books and paying-in books, don’t forget to bring them.
Loan statements – Your accountant will need to view them to ensure that the closing balance is appropriately recorded in the books and that the right amount of interest is deducted as a deductible cost.
Finance agreements – Copies of any new agreements entered into during the fiscal year. Interest on repayments is a tax-deductible cost, and the item acquired may qualify for yearly investment or other capital allowances.
Business credit card – They will also want these statements. Spend time emphasizing any personal cards that you sometimes use to pay company costs. This will save your accountant the trouble of going through them.
Every penny earned from sales. That includes all of your sales invoices for the year (whether paid or not) as well as data of your daily takings if you do not issue invoices.
Purchase invoices and expenditure receipts for the whole period If your accountant does not have these, they may have to make assumptions and/or certain costs may be overlooked entirely, raising your tax burden.
Receipts for petty cash – At the conclusion of the fiscal year, your accountant will want the petty cash balance. Because they will need to balance your funds, these documents are critical.
Payroll records — Unless your accountant handles your payroll, you’ll need a print-out of each month’s pay run so they can double-check that all wages and employer national insurance are included.
Stock valuation — at the end of the year, a valuation of any stock owned is needed. This should be included at the cost or value, whichever is smaller.
Keeping your records on paper is perhaps not the ideal technique to have, therefore you may hear from your accountant soon after you have submitted your documents. They’ll most likely be looking for missing documents, and maybe even paperwork relating to the right tax year.
As we get closer to Making Tax Digital, you should think about switching to online accounting software. This will maintain all of your documents in one place and automatically organize them for you, so you won’t have to worry about leaving anything out since you can just provide your accountant access to your online records throughout the year. We provide customers with access to QuickBooks, Xero, and Dext (previously Receipt Bank), as well as training to ensure you are comfortable with how everything works.