It is coming around to that time of year….yes, Tax Return Season (I bet you thought I was going to say Bonfire Night, New Year or indeed Christmas). In the tax profession, all these events are welcome distractions to the pending deadline that is 31st January each year.
This is the deadline for the online filing of a UK self-assessment tax return for those who fall into one of the many criteria to complete a return annually.
With the deadline looming ever closer, many people will start to panic about whether or not they will be able to complete and submit this on time to HMRC. Here we will share some top tips to help you complete your return.
Be accurate
– it is highly recommended that you do not simply estimate / guess the numbers that need to be included in your return. What is most likely to happen will be that HMRC will write back to you to request the accurate figures. Therefore, if you don’t seem to remember or have the documentation showing what you received, it is strongly advised that you contact your bank/employer immediately to obtain a copy of your bank interest certificate/statement or P60.
Be sure you get the treatment right
– tax legislation is highly complicated and if there is a source of income or gains that you are not 100% of the correct treatment, it is strongly discouraged that you simply guess what the tax should be. If the tax you calculate on your income or gains is incorrect, HMRC will come back to you with the possibility of interest and penalties on top of the additional tax you may well be due to pay.
Be complete
– be sure that you include all of your income. In addition to the first point above, if you aren’t sure of a figure, don’t estimate it or even worse, don’t simply omit it from your returns. Knowingly not declaring figures in returns is tax evasion which in the tax world, is a big no! Therefore make sure that you include all of your income and gains on your tax return.
Be organised
– it is recommended that as soon as any tax sensitive information is received (whether it be from a bank or your employee), this information is stored secured, safely and easily accessible. This is because when it comes to actually doing your return, you don’t want to panic over where certain documents are. Also, as soon as the end of the tax year passes (5th April), it is recommended that you complete the returns as soon as possible after this deadline. This not only avoids the last minute panic that a large majority of taxpayers go through each year, but it also will help you to manage your tax liability to ensure you have enough funds to settle this come 31st January.
Be open to using a tax adviser
– although many will see this tip as the most costly (of course using a tax expert is going to cost money) but it will most likely take a lot of the stress and complexity of completing a tax return away from you as the individual. Using a tax adviser will not just reduce you stress, but they will (or should) make sure the correct tax treatment is applied to your income as well as providing suggestions as to how you could reduce your tax further in future years through tax efficient schemes.