Self-assessment advice high on the agenda for businesses
Self-assessment advice is possibly one of the most requested accountancy services, and is on the rise due to self-employment being at record levels. According to an article in the FT, more than 385,000 tax payers left filing their self-assessment until deadline day this year and 870,000 people missed the midnight cut-off.
So, what is it that makes us bury our heads in the sand when it comes to this mandatory task? Well, tax is hardly an exciting topic, and filling out lengthy forms has got to be in most people’s top five most hated chores. That said, it’s an obligatory duty and one of the downsides of being self-employed.
Before you start thinking about Christmas parties, presents and decking the halls, why not get on top of your dreaded tax return and head into the festive season without the burden of tax duties hanging over you?
Online or on paper?
The deadline for filling out and submitting a paper return is 31st October, so with that date fast approaching, it’s time for either rapid action, or getting an online account on which to file. If you are already registered with HMRC for an online account, you will have log-in details, if not, you’ll have to register online. It can be around seven days before your activation code is sent to you, so the earlier you request it, the better. The deadline for online submissions is 31st January.
Get your paperwork in order
No one likes paying more than they should in tax, so the way to ensure you only pay what you owe is to have your paperwork in order. If you’ve been keeping adequate records, which is a requirement of HMRC, this shouldn’t be too arduous. You’ll need details of income and expenditure, so have sales invoices, purchase invoices, receipts and bank statements to hand. If you run your business from your home, there is tax relief available for elements such as energy used, council tax, phone and broadband. HMRC provides a facility to calculate allowable expenses on its website.
Penalties for late filing and late payment
The fine for filing a self-assessment tax return late is £100. After three months, further charges are added at £10 per day. HMRC can be lenient in cases where genuine circumstances have caused someone to file a return late, but before you start considering your excuses, it’s worth noting that HMRC has heard some of the best excuses for missing the self-assessment return deadline.
For those employed and paying tax through PAYE – which is deducted from their earnings by their employer – there is no need to worry about a self-assessment form if there is no other taxable income for the tax year. Higher rate tax payers may have to fill one out, and couples earning more than £50,000 a year and claiming child benefit. If you’re not sure whether you need to fill one out, the HMRC website has a guide on who should fill out a self-assessment tax return.
In many cases, seeking self-assessment advice from an accountant is the best option. Not only will an accountant know exactly what expenses you can claim for, but they will ensure your return is filled out accurately and on time, avoiding common pitfalls and penalties incurred by people who are unsuccessful in going it alone.
Need self-assessment advice? Get in touch on 01827 54944.