Filling the annual self-assessment tax return of HMRC does not have to be a painful process. You can handle it easily with some handy tax return advice and tips. As soon as we pack the Christmas decorations away and polish off the last mince pie, we realise that the tax return season is, indeed, upon us. Over 11 million people need to submit their annual self-assessment form without any further ado to HMRC each year by 31st January. This form is essential as it enables us to calculate precisely how much income tax we need to pay to HMRC prior to the stipulated deadline.
In order to make the task easier for you, we share with you the top tips and tricks to ensure that filing the annual self-assessment form becomes as stress-free for you as possible!
Verify If You Are Required To Fill Self-Assessment Form At All
If you get a notice for self-assessment or a tax return form, it means that you are legally obliged to fill it up, and self-assess your complete tax liability. However, as per government figures, over 400,000 people do not have to fill in the self-assessment form year after year. Therefore, you might want to check if you really need to do it before you begin.
If you are currently in a business partnership, a company director or work as a sole trader and have a salary within a specific financial year, you are required to file a tax return. The same holds true for employed individuals and those who pay their tax through PAYE but have self-employed income coming in as well. A few other circumstances might necessitate you to fill a self-assessment form like claiming additional relief on tax on pension contributions in case you fall in the bracket of a higher rate taxpayer.
On the contrary, if you are sure that filing a tax return is not required on your part, call HMRC at 0300 200 3310 and then request that they withdraw it. In addition to that, if you are not able to submit your tax return by the stipulated deadline of HMRC, you will have to pay an automatic penalty of £100 as well as added interest and penalties on the tax that you owe.
Now, Register Yourself For An Online Self-Assessment Account
You can file your tax return on paper or online. If you choose to do it online, you can enjoy a number of key benefits such as:
- You can print a copy or save everything for your records.
- You can file later as the last date for self-assessment on paper is 31st October while for online submission, you will have till 31st January.
- The National Insurance and tax contributions that you owe are calculated automatically so that you can view and adjust the payments easily.
- HMRC immediately acknowledges your tax return. Hence, you do not have to stress over losing it in the post.
- Finally, you can check your account whenever you want to view the previous tax payments as well as the tax you owe.
If you wish to submit your tax online, register at the official website of HMRC for an online account. You will then receive an activation code via post to initiate. Hence, it is best not to drag your feet and begin the process as soon as possible.
Gather All The Paperwork
Before you begin filling the form, it is necessary to gather all the relevant paperwork and documents. This includes records of the sales and income, business expenses and bank statements of your business. You might need your employer to give you a P60 form that shows the income as well as the tax that you have paid on it. You might even need a P45 form in case you have left a particular job within a specific tax year or a P9D/P11D showing any expenses and benefits. Remember all the interest details that you have received on building society or bank accounts, dividends from any investments or other income you get.
It is pertinent to mention here that filing your tax return is super easy and straightforward. That said, if your entire tax situation is complex or you are not 100% sure of any part of your tax return, or you are expecting a significant tax bill, it is best to employ an accountant who can help you out. Although this will be an added expense, you will be extremely grateful for the help and costs you end up saving in the long term. Get in touch with CloudCo Accountancy Group for expert help with your taxes every year.