Here are our top tips if you’re facing Self Assessment alone this January for the first time.
Check Before You Start
Do you definitely need to complete a self assessment tax return this January? This January’s tax returns cover the period of April 2017-April 2018, so if you only started receiving an unemployed income after April 2018, you’ll need to wait for next year. And if you received income outside of an employed roll during the April 2017-April 2018 period then your Self Assessment will need to be completed this January.
Self assessment isn’t only for freelancers. If you’re self-employed, a partner in a business, or if you have supplementary income from renting a property, dividends and/or investments you are required to complete a Self Assessment Tax return. Here’s a simple online questionnaire provided by the Government that you can use to check if you’re still unsure.
Register For Self Assessment
You should have already set up your online account with HMRC, the deadline to register for Self assessment was back in in October 2018. If you’ve missed this, call HMRC as soon as possible to let them know about the oversight. You’ll likely face a penalty and they will be able to tell you how to proceed.
If you’ve already registered you’ll need to track down your 10-digit Unique Taxpayer Reference (UTR) in order to complete your tax return online. If you’ve lost your UTR contact HMRC as soon as possible – HMRC won’t be able to give it you over the phone, so you may need to ask for a new one, and this can take a few days to arrive in the post, so don’t delay!
What To Have With You
Make sure you’ve got all the following things to hand before you start your tax return, or you’ll end up having to stop midway through the process:
- Your Unique Taxpayer Reference (UTR)
- Your National Insurance number
- Details of your untaxed income from the tax year (this includes income from self-employment, dividends and interest on shares)
- Records of any expenses relating to self-employment
- Contributions to charity or pensions which might be eligible for tax relief
- P60 or other records showing how much income you received that you’ve already paid tax on
A lot of this paperwork can be made much simpler by using cloud accounting software in the future. And with MTD deadlines looming, why not kill two birds with one stone this January and sign up. If you’re a Warr & Co client you can access exclusive discounts.
Are You VAT Registered?
If you are and haven’t yet invested in accounting software, then you’ll need to manually deduct VAT from your income & expenses. It’s a simple sum to do, but it’s commonly forgotten and not doing so can lead to a fine from HMRC.
Get Help Online, Not Over The Phone
Use HMRC’s video guides and helpsheet to get you through the process itself before trying to contact HMRC directly, you could be on-hold for a long time in January! The helpsheet sits here and the videos are all in a YouTube playlist. We’ll admit that the helpsheet is far from short and sweet (15 pages of solid text…) but it does cover a lot of information. You could always try searching the PDF for specific terms if you get really lost (CTRL + F). Good luck!
Fill In The Form… Then Pay!
There’s so much advice out there about filling in the form itself that you may well forget to actually pay the money! Your deadline for payment of the right amount it 31 January. If you’re eligible to pay HMRC directly online, brilliant. If not, you can pay at the Post Office.
If you can’t pay, don’t panic. HMRC are often happy to set up repayment schedules for you, however these will come with interest so don’t aim to pay back your tax this way, use it as a last resort!
Prepare For Next Year – Go Digital
As part of the government’s Making Tax Digital initiative, businesses who are over the VAT threshold (£85,000 pa) will be required to use cloud accounting software from April 2019. Even if that doesn’t apply to you, we’d recommend hopping on the MTD bandwagon asap as MTD for all is expected to be on the horizon in the next couple of years anyway.
Not only will cloud bookkeeping it save you hours every month and help keep track of your invoices and expenses, it will automatically estimate your VAT payments and annual taxes so you won’t be caught by surprise.
Get A Helping Hand
We could save you a lot of time, worry and money by handling your self assessment for you.
We prepare all the necessary computations, complete your return and even offer advice on how you can minimise your tax liability. We can act as your agent, dealing directly with HM Revenue and Customs on your behalf, but it’s a popular service at Warr & Co and availability books up fast. If you’d like us to handle your Self Assessment next year, contact us by October 2019 at the latest to book your spot.
And remember, we can offer discounted rates on leading cloud accounting software, which can make life so much easier – we’ve picked out three brilliant providers to partner with, contact us for pricing.