For self-employed practitioners that are preparing their tax return, the key to lightening the burden is to keeping good records, TWD Accountants has advised.
“Good record keeping does not necessarily involve employing a professional bookkeeper, or investing in expensive computer software. A basic accounts ledger, diary notes or simple computer spreadsheet can be sufficient to record your income and expenditure,” tax expert David Davies told OT.
The accountancy firm advises that it is important to have a separate bank account for business income and expenditure. “If you use a credit card, then again, separating your business and personal transactions into two separate cards is recommended. Separating your business and personal life will make the preparation of sole trader accounts easier and quicker. It also offers a limited amount of protection should HMRC decide to enquire into your business affairs,” Mr Davies said.
For locum optometrists, TWD has confirmed that practitioners need to be aware of three general forms of transaction that need to be recorded: bank transactions – payments made from the bank and deposits made into the bank; cash payments and cash receipts; and credit card payments.
When deciding on how to record transactions, practitioners must make provision to identify which receipts or payments are cash, bank or credit card.
For cash receipts, the accountancy firm advises that, “we must also be able to identify any cash not deposited in your bank, but used for sundry cash expenses or general living expenses.”
Mr Davies concluded: “Good record keeping is an essential part of running your own business. Failure to maintain good records could result in you paying more tax than necessary. It should also be borne in mind that your bookkeeping records and supporting receipts should be retained for five year and nine months after you have submitted your tax return to HMRC.
“When it comes to preparing your annual accounts and submitting your tax return, you can look to do this yourself, but given the complexities of the UK tax system, it’s probably advisable, and certainly safer, to get an accountant to do it for you.”
TWD Accountants offers AOP members a fixed fee tax return and accounts service. Over the last 15 years, hundreds of members have taken advantage of its services.
Full information on TWD's services for locums, as well as practices, can be found under the membership benefits section of the AOP website, or by calling David Davies at TWD Accountants on 0161 480 5665.
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