Take control of your finances and avoid a deadline day meltdown by following these self-assessment tax return tips.

Urrgh tax. Most of us don’t like paying it (although we do because we know it’s our civic duty).

And if you’re creatively inclined, you might avoid thinking about it altogether – until the very last minute when you have no other option.

But, as tax adviser Andy Muckett explains on the Singing Teachers Talk podcast, there is another way.

Don’t pay more than you need to (because you were too disorganised to claim for everything to which you were entitled).

And don’t get fined because you missed your filing deadline.

Get organised.

Here are six tips from Andy to get you started.

1 Don’t bury your head in the sand

If you’re a self-employed singing teacher, filing a self-assessment tax return is inevitable. So, grasp the nettle and educate yourself.

“It can be difficult for creative minds to get their heads around form filling and the mundanity of that kind of thing,” Andy says.

“Some people find it a bit overwhelming especially if they’ve previously been PAYE. But if you’re self-employed it’s your responsibility.”

2 Save a bit each month

Avoid a last-minute scramble to get the funds together to pay HMRC. Put money aside each month to cover your annual tax bill.

“Saving can be a difficult discipline to get into if you’re not used to putting money aside for a bill at a later date,” Andy says.

“But a good rule of thumb for a basic rate taxpayer – that’s someone earning under £50,000 a year – is to save 20% of your top line income before any expenses.

“Put 20% into a savings account, and in theory, you will have more than enough. If you want to be even more sure, put away 25% and build up a little buffer for emergencies.”

3 Register as self-employed as soon as you can

Technically you must register by the 31st of October following the tax year in which you became self-employed. But Andy recommends not leaving it that long.

“The sooner that you can register for self-employment, the better,” Andy says.

“Experience tells me that if you leave it late to register, you might not get a reference number issued by HMRC in time. If this happens, you could end up doing a late tax return, which means you be hit with a penalty.”

4 Remember, you may have to pay back some of your student loan

“There are several different types of student loan plans, but broadly speaking, when your income hits about £25,000, repayments start to kick in,” he says.

“That is worked out as part of your tax return. You pay the student loan repayment at the same time as you pay your income tax on your self-assessment tax return.”

5 Be aware: You may have to declare income earned abroad

If you pick up a gig or two abroad, do you have to let HMRC know? The answer is probably yes. However, if you spend a lot of time working overseas, it could be a different scenario.

“Assuming that you are deemed a tax resident in the UK for the year, you will be taxed on your worldwide income, wherever you receive it,” he says.

“But you get what they call double taxation relief in the UK.

“If, for example, you earned the equivalent of £2,000 abroad and paid a 10% withholding tax in that country, so £200, you would get a deduction for that on your UK tax return.”

However, if, say, you spend a year working on a cruise ship, you might qualify for Seafarers’ Earnings Deduction. This is a 100% tax exemption on foreign earnings. If you think you could qualify for this, seek professional tax advice.

6 Keep track of your expenditure

The list of things you can claim as expenses is long. It includes speakers, microphones, laptops, singing straws, sheet music, backing tracks and training courses (yep, studying with BAST is tax deductible).

If you work from home, you can also claim some money for bills such as electricity, gas and water. HMRC have general guidelines on this. Alternatively, you could come up with “a fair and reasonable apportionment of those bills” depending on the space you’re using and for how long each week.

And if you use your car to get to lessons or choir sessions, you can claim mileage of 45 pence per mile for the first 10,000 miles and 25 pence per mile thereafter. Rates apply to petrol, diesel, hybrid and electric vehicles.

You’ll need records and receipts to back up your claims, so have a system in place to stay on top of the admin.

There are many apps available that can help. Andy recommends Dext Solo.

Learn more

Listen to the podcast, where Andy also explains:

• When best to register as a limited company.
• The National Insurance implications if you take on a part-time PAYE job when you’re self-employed.

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