Lets Talk Tax - Your January Tax Checklist and An Overview of Allowable Expenses
Make Sure You Maximise Your Tax Benefits
I know you; it’s probably too soon to be talking about tax and money; your mince pies haven’t even settled!
But it's part of our job to remind you of the business things you might want to forget or bury your head in the sand about, and we don’t want nasty tax deadlines to catch you by surprise! January is the first month of the year and the first quarter. Don’t forget to join Sarah on Tuesday, the 9th Jan at 4 pm for the first quarterly planning session of the year - The template and link can be found here.
Self Assessment Tax Returns: Your January Checklist
The UK tax year ends on April 5th. However, the Self Assessment tax return deadline is on 31 January each year. This means that the deadline for filing your 2022-23 taxes is by midnight on 31 January 2024. This is also the deadline for paying any tax owed for the previous tax year (and your first payment instalment on your account).
Corporation Tax: Planning Ahead for July
For those who operate their therapy practice as a limited company, you have a different set of tax rules to follow. Your Corporation Tax is due nine months and one day after the end of your company’s financial year – for many, this falls in July. To prepare in advance, it's essential to be aware of your company’s financial year-end.
Staying Financially Healthy
Just like we encourage our clients to practice regular self-care, our practices need regular financial care. This includes keeping meticulous records, understanding our tax responsibilities, and planning for these significant deadlines. Late submissions or payments can result in penalties, an unnecessary stress we can all do without.
If you’re feeling overwhelmed, consider seeking advice from a professional accountant or tax advisor. They can clarify your tax situation, help optimize your tax position, and ensure you meet all your obligations on time.
Let’s ensure our financial health in 2024 is as robust as the support we provide our clients. Here’s to a year of financial organization and clarity!
Allowable Tax Benefits
What's Allowable and What's Not: Navigating expenses can be tricky, especially when they serve a 'duality of purpose.' For instance, everyday work clothes might not be allowable (I’ve checked), but protective clothing like high-visibility vests, which are solely for work, are. And remember, some items may come with a 'benefit in kind' charge if used for personal enjoyment. A 'Benefit in Kind' charge applies to items or services you get through your job that you can also use personally, like a company car. HMRC values and taxes these perks because they count as a personal benefit, which means you might pay more Income Tax. Your company might also have to pay extra National Insurance on these perks.
Essential Allowable Expenses:
Accounting and Legal Fees: Professional services are vital and deductible.
Advertising, Marketing, and PR are essential for attracting new clients.
Broadband and Phone Costs: Necessary for staying connected with clients and running online sessions.
To read the full list of allowable expenses, including detailed explanations and tips on managing each effectively, become a member of Therapist's Corner. Our membership offers extensive resources tailored specifically for therapists in private practice.