How to Calculate Your Business Turnover for Your Self Assessment Tax Return

Business turnover self assessment tax return

It’s crucial to calculate your business turnover correctly for your self assessment tax return. Show too much and you’ll pay too much tax.  Show too little and you could face penalties.


What is Business Turnover When You’re Self Employed

The easiest way to work out your business turnover is to use the cash basis (check if you are eligible for this here) and you prepare your business accounts to match the tax year (a tax year is 6 April to 5 April).

Business Turnover means the revenue you earned across all your sources of income.  This includes:

  • Cash payments from your customers;
  • Invoices paid by your customers;
  • Any money you were paid via online websites like eBay, Amazon, Shopify or your own Website.

Business turnover does not include money earned as interest or business loans.  These are dealt with in a different way.

If you are ineligible for the cash basis your business turnover be made up of all the invoices raised during your accounting period, any cash owed to you and any online payments you are waiting to receive.



What You Need to Calculate Your Business Income for your Self Assessment Tax Return

Before you get started, it is helpful to pull out the following information.  It will make things much easier.

  • Bank statements
  • Sales Invoices
  • Monthly earnings statements in relation to online earnings eg: shopify, eBay or Amazon.

What You Need to Do

To calculate your business turnover for your self assessment tax return you need to:

  1. Write down your accounting period;
  2. List out all your sources of income during your accounting period;
  3. Run through your bank statements and list out all income received during your accounting period;
  4. Find amounts received into your bank account are net of charges, fees or other deductions.
  5. Find statements and documentation that relate to the amounts in #4;
  6. Note down all charges, fees or other deductions from the statements in #5;
  7. Add back all deductions and charges to the figures in #4 – you need to show your business turnover gross (that means before any deductions).

How to Make Calculating Business Turnover Easier

If you are fed up manually calculating your Business Turnover, then it may be time to switch to an accounting app.

Freeagent is an accounting app that is growing in popularity in the UK. It links with your bank accounts through something called ‘Bank Feeds’.  The bank feeds then pull in your data on an ongoing basis.  Freeagent even learns how your transactions should be allocated, so all you have to do is approve the postings!

Freeagent also has the facility to file your self assessment tax return directly with HMRC.  It pre populates a tax return in the app, ready for your approval and filing at a touch of a button.

Read my in depth review of Freeagent here and find out how I use it in my Business!

Accountant In Your Inbox

I'll help you to make more profits, pay less tax and stay on the right side of the rules. Enter your email address to connect with me!

No spam ever. Unsubscribe at any time. Powered by ConvertKit