Don’t Worry About Winter… Self Assessment Tax Return Time is Coming

The summer of 2018 will be remembered as a time of searing heat, when the country was united over the greatest competition in the world. Eventually, Dani and Jack would go on to lift the Love Island trophy, while England players also managed to restore pride in the national game, even though they couldn’t quite bring football home. But now the summer holidays are over and one thing at the back of many minds, nagging away like a dripping tap, will be the often-painful tax return.

We ask all the people of Birmingham and beyond – are you ready to get stuck in to your accounts?

Don't panic about your tax return, just yet, but September is the time to quickly get prepared.


While HM Revenue and Customs (HMRC) reported it surpassed its record of completed tax returns for last year – with 10.7 million submissions in on time – almost 750,000 people missed the deadline, running the risk of a £100 fine. So businesses, sole traders and individuals who are required to complete a self-assessment can avoid any nasty frights down the line by getting their affairs in order now while there are still five whole months to go to the online returns deadline. However, should you use a paper return the deadline for 2017/18 is coming up as early as 31 October, Halloween – scary, right? Furthermore, if you haven’t registered for Self Assessment, you have little over a month. Don’t leave it too late to prepare or file the return – mistakes are made when you rush.


Tax Return Deadlines

> The deadline to register for Self Assessment is October 5 2018;

> The paper tax returns deadline is midnight on October 31 2018;

> The deadline for online returns is midnight on January 31 2019.

Electronic tax returns for the 2017/18 year are due on 31 January 2019.


Your First Tax Return

If the 2017/18 financial year is the first in which you were trading, and you have never submitted a tax return before, you might be feeling more anxious. You might not even be self-employed, but are required to provide a Self Assessment due to other income. Whatever your situation, Adams Moore can take you through the process, and help you be sure the i’s have been dotted and t’s crossed, but the first thing you must do is register for Self Assessment for 2017/18, by visiting the registration page and submitting your details. Once registered, you’ll be given a UTR (unique taxpayer reference), which you will need to fill out and file your tax return. Keep a note of it somewhere safe so you can find it when needed. You will find further information about being prepared for your first tax return, here, in a previous article.


What Will you Need to Complete a Tax Return?

To fill out your return, you’ll need to know your earnings for the tax year (from 6 April to 5 April the following year) and details of any expenses you want to deduct. It’s important to keep a record of your income and expenses, to make filling out the return easier when the time comes. There are apps or software that can help with this, such as Xero, which keep digital records, allow your accountant to access the data directly and have other features such as invoicing, purchase order and quotes.

Allowable expenses include staff, office services and equipment and travel costs – including the cost of salaries, stationery, internet, phones, fuel, parking and train or bus fares. Advertising and marketing, such as website costs, are also included, along with anything you buy to sell on, such as raw materials. The cost of your business premises is also an allowable expense, including the heating, lighting and business rates. If you work from home, you can still claim business premises costs, but only a set amount which offsets your mortgage or rent, heating, electricity and council tax.


What Should you Quickly Collate?

> Details of your income – which might be your P60, P11D or your payslips;

> Interest statements from banks and building societies, details of pension contributions and any information about student loans or Gift Aid donations. If you need information from banks or building societies, you should contact them straight away;  it may take them time to get it back to you, but most people should be able to access old statements online;

> Other personal financial records to support claims of how much you spent – such as bank statements, cheque stubs or receipts.

Gather all the paperwork required to complete your tax return for maximum efficiency.


What Should you Do if you Have Records Missing?

> Try to get as many copies of lost or destroyed documents as soon possible – for example by asking banks or suppliers for duplicate statements or invoices;

> Use ‘provisional’ figures if you can’t recreate all your records, which means you’ll be able to get paperwork to confirm your figures later. You must use the ‘any other information’ box on the tax return to say this is what you are doing;

> Use ‘estimated’ figures if you will not be able to confirm the exact amounts at a later date, and again use the ‘any other information’ box to give details.


Who Else Needs to Complete a Tax Return?

Some individuals are required to fill out and file a Self Assessment tax return. You’ll need to complete one if, in the last tax year (6 April 2017 to 5 April 2018):

> You got more than £2,500 from renting out property;

> You got more than £2,500 in other untaxed income, such as tips or commission;

> Your income from savings or investments was £10,000 or more before tax;

> You were a company director – unless it was for a non-profit organisation and you did not get any pay or benefits, like a company car;

> You made profits from selling things like shares or a second home and need to pay Capital Gains Tax;

> Your income (or your partner’s) was more than £50,000 and one of you claimed Child Benefit;

> Your taxable income was over £100,000;

> Your State Pension was more than your Personal Allowance and was your only source of income – unless you started getting your pension on or after 6 April 2016.


What Should you Do if you Can’t Pay your Tax Bill?

HMRC may offer you extra time to pay your bill if they think you can settle the outstanding amount in the future and they will set up a plan for you to pay in instalments by Direct Debit, on the agreed dates. We would advise you speak to an accountant, business adviser or personal adviser if you find yourself in any financial difficulties; there may be funding or operational changes that you hadn’t considered, which could turn your business round.

If you can't pay your tax bill it would be wise to speak to an accountant to discuss funding.


Need Help?

If you need help with Self Assessment, you can appoint someone to fill in and send your tax return, such as an accountant, friend or relative. We offer a free initial consultation if you’d like to discuss your requirements, and don’t forget that accountancy services are tax deductible for businesses and sole traders. Alternatively, you can contact the HMRC helpline on 0300 200 3310.