Tax returns can look pretty daunting at the best of times, however, if you're self-employed and aren't entirely sure what to include in the box marked "business income", they can get even scarier! However, the experience doesn't need to be that difficult if you just bear in mind a few simple tips.

Firstly, it's important to check the dates of the tax year that you're providing business income for. This means that, for this tax year, you need to include all your business' income that was earned between 6th April 2010 and the 5th April 2011.

Secondly, you have to remember to include income in the tax year that it was earned - not when your customers paid you. So, for instance, if you issued an invoice for work done in March 2011 and your customer paid you on 30th April 2011, that invoice has to be included in your income for the tax year to 5th April 2011.

However, if you're selling services rather than goods, you also have to be sure that you work out your income on the basis of when you did the work. For instance, if you completed a piece of work in March 2011 but you didn't invoice a customer for it until 30th April 2011, you have to include that income in the tax year to 5th April 2011, because the work was done before the end of the tax year.

If you had partially finished a project before the tax year ended but there was still some work to do in April, then you need to include the income that would have been due on the work completed before 5th April. This part is a bit complicated however, so if you are in any doubt, you should seek further advice from an accountant.

Another thing to bear in mind is that you should only include trading income from your business. That means you should leave out any income from employment (from any job you have in addition to running your business, your own business does not count as employment), rent of a personal property, transfers into the business bank account from a personal account, bank interest (even if it's a business account), money that you put into the business and money from inheritance. However, that's not an exhaustive list, so seek advice from an accountant if you are still unsure about what qualifies as business income.

Finally, if your business is registered for VAT, remember that the figure for trading income will be your sales exclusive of VAT. If your business is on the flat rate scheme, however, then this figure would be your sales net of flat rate VAT.

Even something that sounds as straightforward as "add up all your income for the tax year" has hidden pitfalls. However, by making full use of award-winning online accounting software, you can calculate this figure and be ready for your next tax return.

The author of this article is a part of a digital blogging team who work with brands like FreeAgent. The content contained in this article is for information purposes only and should not be used to make any financial decisions.