On January 31st, your self-assessment tax return is due and many will leave it until right up against the deadline before taking action.
With the self-assessment tax return often being completed online, it can be easy to think you can leave it until the last minute. However, if a large portion of users try and complete their tax return on the same day, there can still be delays in processing, so it’s important to get ahead of the game to prevent your return from being placed in a queue.
To help you get on top of your tax return, here are 5 tips for preparing in advance for your self-assessment tax return.
1. Start to organise your accounts
If you have an accountant that handles all of your finance, check in to make sure they have all the records you may need in order to fill out your assessment.
Make a note of any important figures you’ll need to note down and get as much information from your accountant as possible. This could be done through a report or simply over email.
If you handle your own accounts using an online accounting software, start generating reports to help you gather the figures you will need.
2. Create your self-assessment account in advance
If this is your first time completing an online self-assessment tax return, you may need to register for an online self-assessment tax return account. This will allow you to access the self-assessment portal within HMRC’s website, allowing you to complete your return.
3. Collect all expenses
Expenses are classed as anything you have spent money on to aid the running or maintenance of your business. This could be train tickets or coffee shop receipts from a client meeting; new equipment needed to do daily work or essential computer software.
Ensure you have kept all receipts from these transactions, whether they are paper or digital. You will need these when declaring your expenses and they can help you to pay less tax than you need to.
4. If you’ve had freelance work and PAYE work, ensure you have all payslips
Things can get a bit complicated if you have spent some of the tax year working as a freelancer and the other half within PAYE work. Make sure you have any payslips you’ve received from your employer and a full record of all the income you have made from your freelance work.
5. Ensure you are aware of all tax breaks and personal allowance
Make sure you or your accountant are aware of any tax breaks you may be eligible for. This can prevent you from overpaying on your tax and help calculate a more accurate tax repayment.
Make sure you are also aware of your personal allowance, as you should be allowed to earn up to a certain amount without getting taxed. It is important you know what number that is so you can check your tax return payment.
Making sure you have access to all the information needed for your self-assessment return and knowing which tax breaks and allowances you’re entitled to, are the main things you should have ready before the deadline. Being too vague with your return could result in you paying over the odds on your tax, so make sure you can fill out your self-assessment in as much detail as possible.
Looking for a chartered accountant to take care of your accounts? Send our team at Alexander & Co an email to find out how we can help you and your business! Alternatively, you can fill in our contact form and one of our expert accountants will be in touch.