The Twenty Percent – End of tax year update

The Twenty Percent – End of tax year update

This week saw the end of the UK tax year (April 5th) and the start of a new one. This makes a good time to take a look back and review the past tax year.

It’s an opportunity for a fresh start, but also to look back at what you achieved in the past 12 months – not least because this helps with filling out your tax return!

The past 12 months have been anything but ordinary. It began in a lockdown and ended with war in Europe. Therefore, this years’ earnings won’t necessarily be normal when compared with future years.

However, every year has its challenges, both personal and global. I will always try to do my best regardless of the circumstances.

In this post I’ll cover:

  1. End of tax year
  2. Did I achieve my goals?
  3. The dreaded tax return…
  4. Starting the new tax year
Managed to fit in some fun into all the work…

End of tax year

It’s been a busy tax year. This year was my first full year of freelancing alongside working full time. Spoiler alert – it’s tiring.

But, it’s also very rewarding. I’m proud of what I’ve achieved this year, even if I’ve set myself more ambitious targets for next year!

I was promoted in my day job. This was something I’d been aiming to achieve for a while, so I was really happy to have the role confirmed.

It has come with a significant increase in responsibility and workload – and less sleep at times. However, I’m hoping this will settle down as I adjust to the new role.

Freelancing also went well. I worked for about 5 clients – all on a recurring basis – which hopefully is a testament to my abilities.

Did I achieve my goals?

My main goal this year was to manage to juggle everything without letting my standards slip or anything full through the net. For the most part I achieved this. Although there are definitely some projects I could have pushed harder for with a bit more planning and organisation.

In terms of freelancing, I managed to earn about £6,500 this year. This is far more than I could’ve expected at the start of the year, but I’d like to increase this figure this year.

Combined with a pay rise in my main job, I’ve increased my total income by over £14,000 this year (pre-tax). This is a hugely privileged position to be in. So, while I am still able to, I am going to keep pushing to make the most of these opportunities I am lucky enough to have.

At times I felt as frantic as I look in this picture…

The dreaded tax return…

Of course, now the tax year is over, it is time to start thinking about my tax return. In fact, I’ve already had a letter from HMRC asking me to complete my 2021/22 tax return. It’s not actually due until 31 January 2022, but it’s useful to avoid a last minute panic.

Last year was my first year submitting. I only earnt an extra £1,500 in 2020/21, so my Self Assessment tax return was very easy. I also didn’t have to worry about paying too much tax. Taking into account the trading allowance, I only owed about £100.

This year my bill will be much larger. To avoid a nasty surprise, I’ve been putting 25% of my freelance earnings each month into a separate savings account. I may not end up owing the full 25%, but at least I know I can cover my tax bill without worrying.

Side hustle taxes might seem complicated, but they aren’t really. Just take the time to make sure you understand exactly what is required of you.

Starting the new tax year

A new tax year brings a blank piece of paper and the opportunity to start afresh and do things better than last year.

Firstly, I’ve updated all of my spreadsheets. Keeping track of my expenses and income throughout the year can really help.

I have also begun planning out my time, so I have some set ‘freelancing hours’. This is hard as my work varies each week, but hopefully this can allow me to be a bit more organised. – It should also help stop me being hunched over my laptop at 11pm the night before a big deadline!

In terms of financial goals, I would like to increase my total earnings. The ‘big’ aim is £10,000, although I know this will be a challenge. Wish me luck. (And get in touch if you need a freelance writer, proof reader or speaker!)

Aside from all these goals, the most important thing is to stay happy and healthy. I plan on continuing my running journey and breaking some more PBs.

I also have my first holiday abroad planned since the beginning of 2020. I’m planning on making the most of it and really enjoying a well-earned break when it gets here.

Don’t forget to follow me on social media @Katie20Percent to keep up to date with all my latest posts.

Did you know I offer freelance writing services, proof reading/editing and personal finance workshops and talks for schools, workplaces and organisations? I also regularly feature in the media. Get in touch via kroyalsfreelance@gmail.com or reach out on Twitter @Katie20Percent if you’d like to find out more.

If you found this post about my tax year end update, then please share it on social media. What are your top tips for the end of the tax year? Do you have any tips for getting the new tax year off to a good start? Comment below – I’d love to hear your thoughts!

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