If you fulfil specified criteria for self-assessment, you must complete and submit a tax return each year before the filing deadline, which is coming up fast.
Failure to meet the January 31 deadline will result in an instant penalty of £100 being charge, plus interest for each day the return remains outstanding. For anyone who has missed the October 31 deadline for filing a paper copy of the tax return, it is still possible to avoid a penalty by filing online before 31st January.
Am I required to complete a tax return?
If you are self employed, earn above £100,000, are a company director, or in a business partnership, you will have to complete a tax return. If you have any income other than employment that’s dealt with through Pay As You Earn, you will most likely be required to complete a tax return too.
What income do I declare?
You will have to complete the tax return with details of all taxable income received, including employment that has been taxed through the PAYE system. In addition to the main tax return, there are extra pages which are required for other types of income, like foreign income or income from property. Check which pages you require ahead of time so that you don’t forget to complete the form with details of all your income.
All savings and investment income must be declared, along with any PPI interest you may have received. You also include any expenses or allowances you want to claim on the form.
Lastly, mileage allowance, travel expenses and all other expenses must be included on the tax return for the relevant year.
What do I need to complete the form?
You need all proof of income and evidence of expenses to be claimed. You will need your annual P60 form with details of employment income, details of any benefits, bank statements, invoices and anything else that may contain details of your income for that year.
How can I make it easier to complete my tax return?
Make sure you have registered for an online account with HMRC ahead of time. The process can take 7 to 10 days, so there’s no time to waste. If you are struggling to complete the tax return, or you aren’t sure what income needs to be declared, consider an accounting service that will help you to enter the correct information and pay the correct amount of tax.
Failure to comply with the self-assessment tax system can be costly, so if you would like to avoid extra expense, please contact us for an informal consultation.