With thanks to Anna Goodwin for this helpful article
Last Christmas, a staggering 1,773 self-assessment returns were submitted on Christmas Day. That was 13% more than the previous year!
Were you one of these people and if you were, are you heading for the same fate this year?
Well, it is safe to say it really needn’t be this way!
There are many options available (using an accountant isn’t always an option for everyone) and so if you are registered for online self assessment and are doing it yourself this time, then here are my 5 ways to ensure you have a stress free time of it.
1. Make a Start. This might sound like a pretty obvious point but stop procrastinating. Get the tax return from the bottom of your to do list and put it right at the very top. If you don’t, it will get left until the very last minute. If you haven’t been particularly organised with your accounts, then this is the time to get a nice cup of tea (nothing stronger or you’ll lose focus!), block out any distractions and gather a big pile of absolutely everything that needs sorting.
2. Visualise a big income pot. To get your head around all of your income, I advise to imagine a big pot. In this pot you may have:
· Rental Income
· Self Employed Income
· Employed Income
· Partnership Income
· Bank Interest
· Capital Gains Tax
You need evidence for all of your income and for the whole year.
3. File your Expenses. Get all your receipts and evidence together and put them in date order. Number them yourself and file numerically – this will help avoid wasting time with all those very long invoice numbers.
4. Record your expenses. These expenses will vary according to the type of business you have.
The following subheadings can be used as a guide but you can change them to suit your specific expenses:
· Motor Expenses
· Travel including accommodation
· Rent, rates, insurance
· Bank Interest/Charges
5. Go online to https://online.hmrc.gov.uk/ and follow the instructions. If you feel completely lost, seek help to avoid any avoidable penalties.
Penalties for missing the tax return deadline
Length of delay
Penalty you will have to pay
1 day late
A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.
3 months late
£10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above.
6 months late
£300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.
12 months late
£300 or 5% of the tax due, whichever is the higher.
In serious cases you may be asked to pay up to 100% of the tax due instead. In some cases the penalties can be even higher than this.
These are as well as the penalties above.
Once you’re done, you can have something a little stronger to drink, because you’ve earned it!
You can’t beat the feeling when your tax return is submitted. Don’t leave it so late next time though!
For lots more information and tips, buy a copy of my best-selling guide Stress Free Tax Returns, available on Amazonhttp://amzn.to/1h2ypKH
Accountant, Professional Speaker, Mentor, Best-Selling Author
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