Business owners take note. The self assessment deadline is fast
approaching and if you haven’t filed by midnight on 31 January expect
hefty fines from HMRC. Although many can take it in their stride, for
the uninitiated, completing a self assessment can be a daunting affair –
especially if you don’t have a head for figures.
Do a bit of research and approach your personal tax return sensibly,
though (and, of course, follow our simple tips below), and you’ll have
it filed in no time.
Give yourself time!
Your self assessment isn’t something you can just sit down and do in
one evening. If it’s your first time, you’ll have to wait for two
separate pieces of information to arrive in the post from HMRC (your
Unique Taxpayer Reference number, used to identify you, and your HMRC
Online Services PIN number, which gives you access to the online filing
system).
Not only that, but you’ll need your previous financial years’ bank
and credit card statements. Banks often make procuring these records
needlessly complicated, so plan in advance to make sure you have
everything you need.
Get organised
A large part of filing a self assessment is just that – filing. You
need to organise all your financial records sensibly, ready for entry
into HMRC’s online filing system.
Categorise your records by income and expenses, and separate out
revenue streams. For example, you may receive money directly through
your business, but also own a rental property that nets you a few
hundred quid every month. These need to be recorded separately.
Don’t rely on HMRC’s hotline
Although HMRC Online Services is full of helpful hints and tips, its
self assessment hotline becomes virtually inaccessible for the last few
days of January, as disorganised individuals rush to complete their tax
return at the last minute.
You may be able to get through if you persist, but HMRC’s call centres shouldn’t be relied upon around personal tax season.
If in doubt – consult an expert
Those with more complicated finances may well be better off engaging
an accountant to complete their self assessment. Many firms offer a
one-off personal tax service for about £75, which can prove a real
lifesaver if you get stuck.
Remember, you have to pay your tax on the 31 January, too
If you leave your filing to the last minute only to find out you owe
HMRC thousands, that’s bad news for you and your bank balance. Filing
early will allow you to find out how much tax you owe beforehand, so you
can plan appropriately.
Self assessments aren’t always bad news, though. If you’ve overpaid
your taxes in the last financial year you’ll be in line for a refund
from HMRC and filing early means you’ll be at the head of the queue when
the taxman’s purse open.
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