If you earn an income on a self-employed basis in the UK, each year you will need to complete the dreaded Self-Assessment Tax Return. A record 9.57million people filed their return digitally last year and the deadline for submitting your 2016-17 return is looming at the end of this month! If midnight on January 31st isn’t in your diary yet, it should be!
For a lot of small businesses, completing their tax return can be a scary concept. If you are the kind of person who puts off the task, doesn’t have the head for numbers, or keeps their receipts in a disorganised mess in a shoe box, here are our top 5 tips for filing your self-assessment tax return online. We promise, there’s still time!
Getting started, get registered
If you are new to completing your tax return, it’s a good idea to make sure you are set up and ready to go long before the deadline. HMRC recommends that if it is your first time completing a return online, you need to allow at least 20 working days to register. So fingers crossed you’ve already got the ball rolling!
Once you have registered online, you will receive a ten digit unique taxpayers reference (UTR). You will need your UTR whenever you speak to HMRC, as well as when you complete your tax return. But in order to complete your return online, you will also need to register with Government Gateway to opt-in for the service. You will be sent a pin code that needs to be activated within 28 days. Then you’re ready to go!
Check what you can claim in advance
The HMRC website has information here on allowable expenses. It helps massively if you categorise everything correctly as you go when completing your accounts throughout the year. Why not try it for your future purchases and cost of goods sold. Then, when the time comes, you can easily calculate a total figure for each category when you submit your next return.
Have everything you need to hand
You will be asked for information about you and your business. If you have also been employed during the tax year, you will need your P60 and P45 if you subsequently left that employment. On the self-employment side, you will need information on four key areas:
Throughout the online process, you are able to save where you are up to on the form and come back to it at another time. This is great if you time to get it done in one go (or if you realise you are missing a vital piece of information part way through!).
Double check the form before you hit submit
Ensuring that the information you have entered is correct is very important. Make sure you complete every section correctly, leaving time to check your entry before you submit it. A mistake in your submission, even a very simple mistake or omission could result in your tax return being rejected or a fine from HMRC.
Also bear in mind that the closer you are to the deadline, HMRC servers are likely to be stretched and more likely to experience technical problems in accessing and submitting your tax return.
Get the dates in your diary for next year
Don’t leave it until the last minute next year, get the dates in your diary now! If you are planning to submit your return online, you are now able to complete your self-assessment as early as the tax year end on 5th April. This gives you 43 weeks to get it done before the deadline on 31st January next year! Planning to complete a paper return – then 31st October is the deadline to remember. Schedule time in your diary now! Get yourself organised using our tips and avoid the deadline hanging over you throughout the year.
If you are in any doubt what to do, you can contact HMRC directly, or seek advice from an independent bookkeeper or accountant.
So what if you miss the deadline?
The government has announced plans to introduce a driving licence-style points system to help decide if a penalty for late filing should be applied. As it stands today though, failing to submit self-assessment forms on time can result in a penalty of £100, with further penalties of £10 a day applied after three months. Late payment also incurs a penalty plus interest. HMRC has announced that it will exercise leniency on those with genuine excuses, while those who persistently fail to complete their tax returns and deliberate tax evaders will be more heavily penalised. But, any excuses given must be genuine and you may be asked to provide evidence. Simply “finding the HMRC online system too difficult” or “the dog ate my tax return ” won’t count as a proper excuse.
Want to get organised for next years’ self-assessment tax return?
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