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What is a Self Assessment tax return?
A Self Assessment tax return is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.
For employed individuals tax is usually deducted automatically from wages, pensions and savings. However income that HMRC doesn't yet know about, such as profit from a business, usually has to be declared in a Self Assessment tax return.
Before you can file a return you’ll need to register, this can take up to 20 days so be sure to allow plenty of time.
Important tax deadlines
|31st January||Digital self assessment tax return deadline.|
|31st January||Deadline to pay the tax you owe for previous period and first payment on account for following year (if required)|
|6th April||Start of the new tax year - you can now file your previous years return|
|31st July||Second payment on account for the following year.|
|5th October||Deadline to register for self assessment.|
|31st October||Paper self assessment tax return deadline.|
|30th December||Deadline to file should you want HMRC to collect tax owed via PAYE.|
Having to file your Self Assessment tax return is unavoidable if you earn money that’s subject to Income Tax. Whilst filing one may seem daunting, good advice and support can make a big difference.
In collaboration with the experts at online tax return and self assessment software GoSimpleTax, we’ve outlined our top tips to make your Self Assessment tax return much less taxing.
Do some research so you don’t miss out
Improve your Self Assessment know-how
Before starting your Self Assessment, do some online research for advice from reliable sources. You may be able to find ways to save time and make sure that your tax return is properly filled out. HMRC also provide their own guidance on Self Assessment tax returns, including concise Self Assessment videos and live and recorded webinars (registration required for these).
Claim your rightful tax allowances and reliefs
Income Tax payers can claim a variety of tax allowances (upon which no tax is payable) and reliefs (which lower your profit and resulting Income Tax liability). The gov.uk website explains the expenses you may be able to claim if you’re self-employed, as well as Income Tax reliefs and personal allowances. Do some research or seek professional advice to make sure you don’t overpay and are claiming everything to which you’re entitled.
Consider using simplified expenses
“Simplified expenses” is an HMRC-approved way to claim business expenses using flat rates rather than working out actual costs, which can take much more time and effort. You can use simplified expenses for business mileage, operating a business from home or living at your business premises (e.g. if you run a B&B).
While saving you time when filling out your Self Assessment tax return, you should be sure that claiming simplified expenses won’t leave you out of pocket. GOV.uk offers a simplified expenses checker tool that enables you to find out.
Reach out for Self Assessment support
In addition to HMRC’s online information resources, you can call its Self Assessment helpline (0300 200 3310 – Monday to Friday: 8am to 6pm). Make sure your personal details and address are up to date in your personal tax account, otherwise you could fail telephone security questions when asked. You’ll need to have your National Insurance number and Unique Taxpayer Reference (UTR) to hand when you call.
If the thought of completing and filing your first Self Assessment tax return or working your way through another one is too much, you could always get an experienced professional to do it for you - or at very least, check over one you’ve filled out. It may be cheaper than you think.
Know the deadlines and get prepped
Don’t miss the Self Assessment filing deadline
As a business owner with so much to do, it can be hard to keep on top of deadlines. But filing your tax return is a job you’re better off getting done and dusted, the deadline for filing your Self Assessment tax return online is midnight on 31st January - missing this deadline will result in a £100 penalty.
Give yourself enough time
You need to go through the return form thoroughly, paying due care and attention when entering data. The more you rush, the more likely you are to make mistakes that later need correcting. Often the reason why people rush is they’re battling the online filing deadline having not allowed sufficient time to complete the return.
File your Self Assessment return early
Why put off completing and filing your Self Assessment? You don’t have to wait for the deadline. In fact, you can complete your return for the previous period from the 6th April when the new tax year began.
Double-check your facts and figures
Once you’ve entered data into your Self Assessment tax return, double-check it all before submitting to HMRC. Take care when ticking boxes, this is where mistakes can also occur. More serious errors can lead to a penalty if HMRC believes they’re the result of your being careless. Don’t let that happen.
Use tools and software to help you
Have all the necessary information to hand
It’s important to have all relevant facts and figures to hand when you begin your tax return. Having to go and find information, from hard-copy invoices, bank statements and receipts, etc, will mean that filling out your Self Assessment tax return takes much longer.
You’ll also need your UTR (ie the unique ten-digit reference number that enables HMRC to identify you), your National Insurance number, P60 if you’re also employed and paid via PAYE (it shows your earnings and tax paid in the tax year), records of earnings from all taxable sources (e.g. rental income, interest/investment income, pensions, state benefits, etc), details of expenses, etc. Accounting software can take much of the legwork out of completing your Self Assessment tax return.
Once you've submitted your return it's important to keep all your records stored safely (including bank statements, receipts and invoices). HMRC could decide to audit your submission for up to six years after the end of the tax year in question.
Use accounting and Self Assessment filing software
Using good accounting software to accurately and regularly record your income and expenses can make completing your Self Assessment tax return much easier, because key numbers are automatically calculated for you. You can also use other third-party software that makes completing and filing your Self Assessment much easier, while ensuring that it is error-free.
GoSimpleTax software submits directly to HMRC and is a solution for freelancers to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.
Get started today, it is free to try - add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.
Superscript subscribers receive a 25% discount via gosimpletax.com/superscript, complete and submit your return for just £36.75.
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This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.