The dreaded day is round the corner – 31 January, when tax returns are sent off and bills are received.
Every year thousands of self-employed people leave their tax returns until the very last possible moment. Here are some top tips to help the late filers.
1. Get your login now
In order to file your Self Assessment tax return online, you need a Government Gateway login. If you don’t already have this, or if you have lost yours, you need to apply for it today. Login details take around a week to arrive; leave it any later and you are likely to miss the deadline.
2. Organise your paperwork
You can dramatically reduce the amount of time and effort required to complete your tax return by making sure that all your paperwork is in order. Arrange your receipts and invoices by date. Make sure that you have copies of every relevant document to hand before you start.
3. Invest in bookkeeping software
Good bookkeeping software is one of the most important weapons in your Self Assessment arsenal. While some business owners still do their accounts on paper, the vast majority have now moved to software solutions. Good bookkeeping software is not expensive, and packages are available to suit every business type. One of the most important benefits is that, come 31 January, you simply have to press a button to get the figures to fill in your return.
4. Understand your entitlements
There is significant confusion regarding allowable expenses and other tax reliefs. As a result, many business owners end up either paying too much tax, or spending vast amounts of time trying to work out what they are entitled to. If you are in any doubt about your entitlements, contact HMRC for general information or your accountant for specific advice.
5. Remember the strike
HMRC call centre employees will be conducting staggered strikes on 31 January. If you think you might need to speak to someone on the phone, you should note that you may have to wait longer than normal to reach an advisor.
6. Remember the payment on account
It is vital that you remember the payment on account when planning for your Self Assessment tax bill. In addition to your balancing payment, you will normally be required to pay 50 per cent of your total bill as a ‘down-payment’ towards next year’s liability.
7. Don't rely on accountants
Finally, remember that January is the busiest time for accountants. If you were planning to ask an accountant to help you complete your return, you should get in there quick. If you’ve not already made arrangements for this, don’t rely on it – you may well struggle to find an accountant with the capacity to do the work.
