As we approach the end of January, the deadline for self-assessment tax returns looms large for self-employed people and small businesses. This can be a highly stressful time and it can be a cause of headaches for many small business owners. That’s because missing the deadline comes with penalties.
In 2016, 870,000 people failed to submit their tax return in time and received a minimum of a £100 fine. You will also be charged interest on any unpaid tax. However, the good news is that there is still time to get your returns in and avoid all the stress of an unpaid bill. Plus, it doesn’t have to be a mad last-minute dash. There are some tips and tricks for getting your tax return completed with minimal fuss and effort. Keep reading to find out more.
Time is running out and you really can’t afford to put it off any more, so you need to act quickly. If you’ve not already registered to submit self-assessment forms for the first time then you need to do it now. You cannot file your return without this. Most of the process is carried out online so it can be quick to get everything sorted and in place so that you can then submit your return as soon as possible.
Remember that you’re not the only one leaving things late and around 30,000 people submit their forms on the last day, the 31st January. However, if you’re one of them, and you leave it until late in the day, you need to be aware that lots of other people will be doing the same. This can cause delays and you should expect the system to be very busy.
You should also double-check that you’ve filled out your form for the correct period. The 31st January deadline of this year is for income earned from the 6th April 2017 until the 5th April 2018. Any income earned after that period will fall into the following tax year.
Include as much information as possible
You need to include all the relevant information about money earned during this period. This includes any money earned from trading, dividends, capital gains and more. When it comes to money earned through interest, if you don’t have the exact amounts, then you should put in your best estimate for now, informing the HMRC of this in the relevant sections. The same is true for your expenses, which should be detailed and as accurate as possible.
Stick to the rules
There are many rules and regulations for small businesses and you need to follow these to the letter on your tax return. You need to make sure that you know the rules relating to special business expenses and understand what you can and can’t claim. You should check these expenses against the HMRC guidelines or speak to other reputable businesses to find out what is and is not acceptable.
Double-check your forms
Before you click to submit your forms, you will need to double-check that everything is correct to the best of your knowledge. You should also make sure that you’ve filled out everything that was required or your forms may be rejected and you will need to resubmit. If you’re really cutting it fine, it’s still better to take your time and ensure that your form is filled out correctly before submitting it. It will be easier and less costly to pay the small fine for a late submission than it will to be rejected at a later date, as this may expose you to further financial penalties. Late submission is not ideal but it is also not the end of the world.
Don’t get overwhelmed
Filling out and submitting your tax returns can be daunting, especially if you’re not used to doing it. There is lots of information you need to know and new rules to get your head around. However, if you take your time and go over the information thoroughly, then you will be able to get to grips with it. There are handy explainer boxes for each section of the form, so click on the icons to read more about what’s expected at each part. Stay calm and work methodically, and, if needs be, take a break and come back to it later when you are in a better mood and have a clearer head. The online platform will save all your information already inputted, so you won’t need to go over anything again.
Use an accountant
Of course, there is one way of making sure that your tax return is filed on time and accurately. And that is to find and use a reliable accountant with vast experience of working with small businesses. They’ll be able to work with you to identify all relevant income streams and ensure that you’re claiming all expenses that you’re legally entitled to. This means that your return will be exactly as required and you won’t be paying any more tax than you owe.
Of course, it’s true that these services will cost. but you may well be able to make this money back through the savings on your tax bill. In addition, the time, effort and stress that you save yourself by outsourcing your return at this late date will be invaluable. It will free you up to carry on working on the business rather than having to burn the candle at both ends trying to get your return completed. Plus, with professional assistance, you’ll be less likely to come under the scrutiny of the HMRC when they assess your return, saving you potential future problems.
Follow the above top tips or get yourself an accountant and this tax return period doesn’t have to be too taxing. Be organised, calm and work in a methodical manner and you can get everything done on time and with minimum fuss.