It’s human nature to put aside unpleasant tasks until the last possible moment which explains why hundreds of thousands of people in the UK, and probably several thousand in Brighton have still not filed their tax returns yet or asked their accountants to do it for them. If you are one of these people then don’t panic, I’ve prepared some tips that I hope will help make the task a bit less daunting –
1. Dig out a copy of last year’s tax return and using this as a checklist to make sure you have all the paperwork you need including p60’s, p11d’s, dividend and bank interest vouchers, rental statements, sales invoices, expense receipts etc. If you can’t find a copy and you used the HMRC website to submit your return you will be able to get last year’s details from there.
2. If anything is missing decide whether you need to get a copy or whether you can just put in an estimate. If it’s a bank interest certificate for your current a/c it’s probably going to be ok to put in an estimate, if it’s your p60 it’s probably not ! Details of dividend payments for example are often available from the relevant company website if you can’t find the vouchers. If you can”t find your p60 then your march payslip (month 12) will give you the same information provided you haven’t moved jobs in the year. If you are still missing key bits of information on the 30th January you can put in estimates, and make a note in the additional information section on p15 saying that you have done this. You can then file the return to make sure you avoid the £100 late filing penalty and then submit an amended return once you have the missing information. (this is called “repairing” the return)
3. If you have self-employment income or rental income make sure you have included all allowable expenses. It’s often worth using an accountant for this as they will be able to identify expenses that you might not know about, such as use of home, wear and tear and capital allowances. If your self employed turnover is less than £73,000 you can opt to just submit what’s called a 3 line set of accounts, just the total income, total expenses and the net profit on the tax return instead of the a full set of accounts. If you started trading for the first time this year you can include any pre-trading expenses on the tax return going back up to 7 years.
4. Make sure you have included deductions like personal pension payments and gift aid payments on the tax return.
5. Review your calculation and compare it with last year. Are there any big differences between the two which might suggest something has been missed or double counted on this year’s tax return. Tax rates haven’t changed a great deal since last year so if your income is broadly unchanged so should your tax bill.
6. If your income from self employment or rental sources in the current tax year has dropped significantly you should consider making a claim to reduce your payments on account to reflect this. Doing this won’t alter how much tax you will have to pay overall but it will improve your cash flow as you will be paying your tax much later.
7. And finally take a deep breath, press the submit button, and make a promise to yourself to do it all a lot earlier next year, or alternatively ask a tax accountant to do it for you next time !
If you have questions on any of the above points are indeed anything tax return related please feel free to give me a call or drop me an email. I’m always available for free initial meetings either at my office in central Brighton or at your home or place of work .