The new tax year!
April 6th marks the start of the new tax year (2023/24). It will finish on April 5th 2024. So what does this mean for you...?
Out with the old
Firstly, it means that the 2022/23 tax year has ended (as of 5th April 2023). Assuming you're already registered as self-employed, HMRC are going to get in touch and ask you to submit your tax return for the tax year that has just finished (2022/23). This will include your income and expense details from April 6th 2022 through to April 5th 2023.
If you’re doing a paper tax return, the completion deadline is the 31st October 2023. Most of us however complete online, the deadline for which is the 31st January 2024. This is also the deadline for paying any money you owe, regardless of whether you do a paper or online tax return. Yes, this gives you 10 months to do it (if online), but why not just get it done now? If you’re looking for incentives to do so, how are these?
1. Everything you’ll be declaring in your tax return is still fresh in your mind;
2. Once done, you’ll see how much your tax and N.I. bills are. You can then pay them any time up until the 31st January deadline. Potentially giving you up to 10 months to pay your bills, allowing you to plan and not having the anxiety of leaving it until the last minute; and
3. Take the stress out. Get it done now so that and you don’t have to think about it for the rest of the tax year. Mine took me 16 minutes, but one of our App users did theirs in 10 minutes!
As always, we’re here to help you along the way. Thousands of you have used our screenshot step-by-step guide on How To Do Your Tax Return, which we make every year by using my last tax return.
In with the new
A new tax year also means that your income and expenses for the tax year start at zero again. Your 'personal allowance', which is the amount of money you can earn before you have to start paying tax, is £12,570 for 2023/24 (it was also £12,570 for 2022/23).
National Insurance rates have also increased for this tax year. Being self-employed we can expect to pay Class 2 N.I.(£3.45 per week) if our profits are £6,725 or more a year. If our profits are £9,881 or more however, then we can expect to pay Class 4 N.I. rates too which are 9% on profits between £12,570 and £50,270 and 2% on profits over £50,270.
As always, a new tax year is a chance for new resolutions! Maybe you’re goal is to not leave your tax return until the last minute this year? Or maybe you want to ensure that you’re recognising and declaring all of you allowable business expenses. Firstly, use this website to read up and get to know what's what. Then, make sure you're recording your income and expenses like a pro from day one. Do that and the rest falls into place.
Or perhaps you’re keen to manage your taxes digitally? The SansDrama Web App makes doing your taxes simple, organised and paperless. Everyone gets a free 10 day trial and it's just £3.50/month after that.
Are you a new graduate? If so, your first tax year out of college is free (just drop us a note to let us know you've graduated) and we'll get you set up!