Tax return tips: How to save time doing your receipts
16th May 2016
The deadline for your self assessment tax return might be a long way off yet, but you can save yourself a lot of time and hassle by managing your receipts properly now. How many times have you walked away from a purchase and then thought, doh! I didn’t get a receipt for that! Maybe you’re in the habit of saying “don’t worry about the receipt”, throwing it away or stuffing it into your bag or wallet where it will never see the light of day again. Here at RIFT we've seen receipts so old that all the print has rubbed off them and you’re left with a useless blank piece of paper – which may have contained some valuable tax relief.
Whatever your personal headaches are with receipts, we hope that these nifty tips will help to banish them and get you organised for when your tax return is due.
Which receipts do I need to keep?
With so many receipts flying around, a good place to start would be to ditch the ones you definitely don’t need. This will make the whole task feel more manageable. So separate out the receipts for personal and household stuff (after you’ve checked to make sure you didn’t buy any business stationery with the weekly shop).
Check out the HMRC website for guidance on exactly what you can and can’t claim.
And then sort the rest of your receipts into these piles:
You can claim for vehicle insurance, repairs, servicing and fuel. BUT you can only claim for the proportion that was for business use, so if you use your own car it is often easier to claim the mileage rate, rather than the individual costs.
All you need to do is keep a log of the miles you do for your business and claim 45p per mile up to 10,000 miles and 25p per mile after the first 10,000 miles (that’s for a car). So that saves you keeping receipts for fuel and doing fiddly calculations to separate work from personal use.
Office, property and equipment
As well as your receipts for postage, print and stationery, you can also claim the business proportion of phone, mobile and internet bills. And if you have an office in your home you can claim part of the utility bills and property insurance.
So dig out your utility bills and phone bills and put them in this pile with any receipts.
Financial, professional and insurance
You can usually claim for bank, overdraft and credit card charges if you have a separate business account. You can also claim the interest on business borrowing and hire purchase, but not the repayment amount. So dig out your bank account, loan and finance statements and add them to this pile.
Also add the invoices for professional memberships and journals, and of course your public liability insurance.
What can’t I claim for?
There are a couple of things that people often think they can claim for, but unfortunately you can’t. Entertaining clients or suppliers is one of them – so cancel that lavish dinner, unless you’re prepared to foot the bill yourself!
Also the clothes you wear to work aren’t claimable unless they’re uniform, protective or specialist clothing. So no wardrobe budget like the TV presenters, I’m afraid.
Finally, any parking or speeding tickets you pick up are not legitimate travel expenses, no matter how important it was to get to that meeting on time!
“Yes, I’d like a receipt”
Get into the habit of asking, especially if you’re VAT registered. If you don’t have records of your business expenses, you can’t claim them. And if you’re VAT registered, you won’t be able to claim the VAT back.
If you’re an avid online shopper, you’ll need to keep those electronic receipts organised as well. Decide how you want to file your receipts. If you’d prefer to keep everything in one folder, name it so. Try not to neglect this simple task, you’ll be kicking yourself when you find yourself scrolling through the “untitled” folder - groan!
You might like to keep all of your receipts, paper and electronic, in one place. Simply scan your paper records and store the scanned receipt in your taxable income receipts folder. Or vice versa, print your electronic receipts and keep them with your paper receipts.
Remember why you’ve saved them
Keep a pen handy to quickly annotate your receipts before scanning and/or filing them at the end of each day. Some receipts will already tell you the date, item, supplier and payment method, but if any of these details are missing, add them now before you forget. There’s nothing more frustrating than sitting down to complete your tax return to find you’ve no idea what that receipt was for. And if you’re getting someone else to do your tax return you’ve made their job a lot easier too.
You might be very organised and like to keep track of every purchase you make throughout the year. If so, make sure you keep your personal and business expenses separate. Even if your receipts happen to include both business and personal purchases - don’t be afraid to ask for two receipts and annotate them or make a copy when you get home. If you’re ordering goods online, make a separate purchase for your personal items and keep those electronic receipts stored in clearly marked folders.
Keep a backup (or two)
Whatever sort of records you’re keeping, it’s a good idea to make a backup or you could miss out on some valuable tax relief. If you’re keeping electronic records and shredding the paper copies, HMRC require you to keep two backup copies.
Keep a copy on your computer but also use online storage spaces like Google Drive, Dropbox or Evernote. As long as you can get on the internet, you can access them anytime, anywhere. No more rifling through mountains of paper because your electronic copy will be exactly where you left it.
Need a hand with your tax return?
At RIFT Refunds, we look forward to tax return time! Send us your receipts and income details and we’ll take care of the rest.
If you need any help with your self assessment tax returns, or if you have any questions then get in touch now on 01233 628648, talking to us on LiveChat, joining us on Facebook, or click the button below to check if you need to do self assessment.