The Self Assessment tax return deadline is almost upon us. If you haven’t completed your online return by midnight on the 31st January, you face a minimum penalty of £100 – even if you don’t owe any tax. We’ve compiled nine easy tips to help you survive this deadline.
- Get started now
The bad news is that if you’re reading this, it’s too late to submit your assessment in writing and you’ll have to set up an online account with HMRC. Once you’ve registered, you’ll be sent an activation code in the post, so make sure you factor in a few extra days. If you register online before 21st January, you’ll have enough time to receive your activation code and meet the deadline – so get cracking! If you already have an account but have lost your ID and password details, you can always visit the HMRC’s help page.
- Know your numbers
In addition to your ID and password, you’ll need your Unique Taxpayer Reference (UTR) number. You should find this 10-digit number on any HMRC paperwork you may have been sent. If not, you must request it again and allow at least seven days for it to reach you. Make sure you don’t confuse your Unique Taxpayer Reference with your National Insurance number, which is always in this format – AA 12 34 56 B.
- Crack the code
If you’ve been paid PAYE, it’s your responsibility to check that your employer has deducted the appropriate amount of tax. It’s not uncommon to find that you have been paying too little (or too much) tax as a result of being on the wrong code. A tax code is usually made up of several numbers and a letter.
- Conquer your form-a-phobia
If filling out forms makes you break out in a cold sweat, you are not alone. About four million other people have left their submission to the last minute too. But HMRC have heaps of help on their website. Once you’re up and running, the calculations are all done automatically and there is onscreen assistance to hold your virtual hand through each step of the application. You can familiarise yourself with the process before taking the plunge with this demonstration.
- Gather the paperwork
Make time to gather all the necessary paperwork before you start completing the form. Things that are often overlooked include interest details on bank and building society accounts, details of dividends, trust funds, receipts and invoices – and of course, the ever-elusive P60. NOTE: If you’ve lost your P60, contact your employer for a replacement – not HMRC.
- Give yourself a break
You’ll be amazed at how many things you can claim for to help reduce your tax bill. Useful tax breaks include mileage allowance, costs of working from home and specialist work clothes.
- Give to receive
If you’ve made any charitable donations, remember to fill in the section ‘Gift Aid Payments’. This will allow the charity to reclaim the basic rate of tax on your donation. So a £10 gift is actually worth £12.50. If you pay a higher tax rate, say 40%, you may benefit as well as the charity. If you gave £100, it is actually worth £125 to the charity and you can claim back £25 (or £37.50 if you pay tax at 50%).
- Cough up
So you’ve made it through the form and have reached the calculation page, but there are still two things you must do. Firstly, your application is not submitted until you re-enter your user ID and password, and secondly, you must pay up by January 31st – undoubtedly the most painful part. Luckily, HMRC has a multitude of ways you can make your payment.
- Don’t make excuses
If, despite all your best efforts, you still don’t make the deadline, you can attempt to be pardoned from the fine. You do, however, need to have a valid reason why you couldn’t fulfil your legal requirements within the allocated time. Unfortunately, flimsy excuses don’t qualify. To find out if your excuse for being late is reasonable, contact HMRC or call them directly on 0300 200 3310.
If you’re still lost in the sea of Self Assessment, the easiest way to sail through is to employ the services of a qualified accountant. Visit 1st Contact Accounting or call 0808 141 2341.