Tax returns submitted late or with errors will incur a whole range of financial penalties from the HMRC. The process can be a stressful one for business owners and the self-employed, with numerous factors to consider before the form is returned. However, by preparing properly and leaving yourself plenty of time, there is no reason why your tax return should incur any fines.
The crucial date for returning your form is the 31st January – anything later than this and the penalties will begin rolling. In fact, for every day over this deadline a £100 fine will be charged, even if no tax is owed. You need to be registered with the HMRC to submit your tax return online so this is recommended ASAP. This in itself can take up to 7 working days for the activation PIN code to arrive, time which can ultimately push you over the deadline.
Filing your tax return online has become the chosen way of filling out a tax return in recent years. They can be completed much closer to the 31st January deadline (paper returns must be sent back by the 31st October) and tax owed will be calculated automatically if everything is filled in correctly.
To help fill in your tax return, all the relevant information should be on hand so the process is made as stress-free as possible. To do this, you should keep meticulous records throughout the year to stop you scampering around for it at the last minute. Such paperwork to save includes bank statements, receipts and details of any benefits received. Additional business activities should also be noted, for example property dealings or stock investments.
What to Include
Any income you have earned throughout the year should be included in your tax return. This could include regular wages from your basic employment, to profits made as a sole trader or public limited company. Also crucial is the P60 form, which shows the tax you’ve paid on your salary in the tax year, and the P11D form information showing any expenses or benefits you received (i.e. company cars or interest-free loans). For business bank accounts, you also need to include how much interest was received and the amount of tax taken off that.
For a personal tax return then other information you’ll need can include:
- Bank account details
- Unique taxpayer reference
- National insurance number
- Bank statements
- Income from renting property
- Pension contributions, annuities and benefits
- Life insurance gains
- Gifts to charity, if applicable
The HMRC ask you to input information as carefully and accurately as possible. Ensure you add up your income correctly and double-check everything before it’s sent off. If unsure of anything then it is advisable to seek a qualified accountant who can help guide you through the process. The HMRC’s Self-Assessment Helpline is also available by calling 0300 200 3310 and quoting your National Insurance number and Unique Taxpayer Reference.
If you enjoyed this blog post the perhaps you would like to read “The Difference Between Revenues & Expenses“?