I am no accountant, ok I lied, I am actually an accountant. I studied accounting as my first degree. Although, I am no longer practising, I still remember a thing or 2 from back in the day, so when it came to filing in my tax returns as a blogger, for the first time last week, I found it a walk in the park. Well almost a walk in the park. My tips here can set you up on the right path when it comes to filing in your tax returns, but do get financial advice from the professionals if you feel you need to.
We all know we should declare any income we make from our blog, but many bloggers find it the whole tax returns a bit intimidating and rush off to hire an accountant. Well, unless you are making a crazy amount of money from your blog, or have the most confusing set of expenses, filing in your tax returns should be fairly straight forward.
Here are some tips to help make the tax returns process a lot easier:
Register as Self Employed/Limited Company
If you make as little as a £1 from your blog, you need to register as self-employed with HMRC. You are breaking the law if you do not, and you can be fined so get registered ASAP if you have not done so already. You can register as a self-employed person or a limited company with HMRC, it all depends on how you view your business. There are pros and cons to both options, so it is best to evaluate your circumstances before you decide on what route to take. However, It is easier and cheaper to start off as self-employed as you don’t have to deal with the costs of forming your limited company, costs which includes setting up a company bank account, and registering your company for PAYE and VAT number (this is different from the Unique Tax Reference number you do get when you register as self-employed, that is free), which could as much as £125, and you SHOULD appoint an accountant to oversee the company’s finances.
As for self-employed, you won’t have to do any of the above. All you have to is to register and file in your tax returns, which you can do yourself. The beauty about registering as a self-employed person is that you could always switch to a limited company in future, when your brand grows and when you see yourself earning more than £25,000 a year, as registering as a limited company will be the most efficient way of managing your tax.
You should have spreadsheets where you take note of every income you make, and every expense. It is best to categorise these into different months, so every month, you should update the spreadsheets with every income you made, and every expense. This way you will have a clear picture of how much gross and net profit you have made every month. Believe me when I say if you get this bit right, filing your tax returns will be very straight forward, and this just not only help with the returns, it also tells you how you are doing financially every month, which is a great motivation booster.
Invoice Your Clients
I do blogger outreach for a few clients and I find it alarming that I need to remind blogger to send in invoices to get paid. Most of them just send in their Paypal email addresses alone and I wonder how they plan to track all incoming payments. Going through the Paypal statements for the entire tax year to track payments is definitely not a good idea. If you are only receiving few pennies here and there, you may get away with not sending your client invoices for payments, but once you start making a good amount of money, not sending your clients invoices correctly and in a timely manner may cost you.
Submit your Tax Returns Early
I know we have until end of January to submit our tax returns but it is best to get it over and done with as soon as possible, and get ready for the next tax year. So submit your tax returns as soon as you can, so you have the time to sort out NI and tax payments if any. I won’t leave it till the last minute.
Fill Out Your Tax Returns Correctly
This goes without saying but it still needs to be said. Make sure you answer every question honestly, as best as you can. There is a lot of information on the HMRC website and you can always give them a call to clarify anything you are unsure of. Also remember to keep all receipts and invoices incase you need to refer to them in future.
These are few tips to help you fill out your tax return. I hope you find them useful. Do you have any tips to share? Drop me a comment, lets chat.
Ooo thanks for the tips! The whole tax return thing scares me! This will come in handy!
Ah glad to hear that..
This is such a helpful post, thanks for sharing your accountant wisdom!! 🙂
Thanks for reading Jess x
Such a great post! I need to go self employed soon and this post has really helped me! Thank you x
Glad it did Sabina x
Although I don’t have to do this yet the thought of having to possibly do it one day is quite scary! There’s lots of great tips here though to help people x
Yea I hope it does help xo
This was such an informative blog post, I find the whole idea of going self employed super daunting but this makes it seem not quite as scary! Thanks!
Glad you found it useful xo
Some great tips here. Thanks for sharing them with us x
Thanks for reading Rebecca xo
Thank you, there are some great tips here and very helpful x
Thanks for reading xo
These are some great tips. I have to mind not to leave it to the last minute like I did last year – that was so stressful!
I can imagine x
Excellent post, so many questions come up about this on blogger forums so nice to have a fellow blogger looking out for us. Thanks S
Thanks for reading xo
Some great hints and tips in this post and the people at HMRC are great when you need help too x
Yea they are great xo
I definitely need to sign up as I am starting to make money from my blog and clients. Oh by the way I have been reading your book and it is so helpful! I have been taking notes !
Oh glad to know you find it helpful. Please leave a review when you are done. Thanks xo
Thanks for the tips!
I find the paypal thing interesting. Some do just send money via paypal and don’t bother with invoices, but then I dont use paypal for anything except blog related so i guess it is a useful way to track those type of payments.
Ah good then. I use Paypal for all sorts so I like to keep it organised xo
This is a very useful post and great for organising ones finances for the blog.
Thanks Nayna xo
Excellent tips. It’s surprising how many people don’t register as self employed, which is a bit naughty! I’m already registered as I used to own a shop and keep a spreadsheet of all records.
Yea very naughty xo
Great tips – I hate accounting type stuff to do – I am not very good with numbers!! Kaz x
Thanks Kaz x
ah this was an insightful post. i definitely agree on using spreadsheets to help
Thanks Nicol. Glad you enjoyed reading it xo
I always make an invoice but I don’t always send it, it depends on what the client wants, I’ve found that’s the easiest way for me at least when many people don’t seem to want them.
Great to always make them for records at least xo
This was really helpful 🙂 Thank you for sharing your tips x
Thanks for reading xo
Thanks for sharing, there are some great tips there.
Thanks for reading Melanie xo
Those were some nice tips there. Thanks
Thanks for reading Nelo xo
Great to hear an accountant view at the same time as a blogger. Great post!! A lot more personal x
Glad you like the post Victoria. Thanks for reading xo
Really useful post thanks Stella. I know I need to look at moving to limited company, so have added to the to do list.
Ah nice. Thanks for reading xo
Hi. So when I start selling stuff how do I put a store on my blog if my readers want to buy my products ?
If you are on WordPress.com, you may need to go self-hosted so you can have a store on your blog.
These are some great tips and so important for people to follow I think so many bloggers don’t realise X
Miss Kitty Kaos – Adventures Of A Riot Grrrl
Thanks Kitty xo
I’m no way near being able to do any of this yet but hopefully I will soon. Great tips though to help get things planted in my head ready for when I need to do it all!
Thanks for reading Kira xo
I always submit my tax return at the last minute but this year I am determined to get it in by the end of June… heres hoping! xxx
Here is to hoping you do xo
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