Special focus: self-assessment tax returns

Need help with your tax returns?
Need help with your tax returns?

Top tips from an expert

With just over three weeks to complete your self-assessment tax return form ahead of the deadline on January 31, the client reviews website for financial and legal professionals VouchedFor’s MD Adam Price has provided his top hints and tips for a stress free- tax return completion:

1. Get working on it as soon as possible: Don’t start tomorrow what you can start today. The deadline is creeping ever closer, so make sure you aren’t leaving things until the last minute. If you have not previously filed your tax return online be aware that registration often takes a few days, and even if you have but have subsequently forgotten your password retrieving your log in details can often take some time.

2. Collect and organise all necessary paperwork: The documents required will differ from one person to the next so figure out exactly what information you are required to submit. If you are unsure then contact an accountant or visit the HMRC website. There is also a HMRC phone helpline, but recent reports indicate that the average waiting time is 38 minutes, and often rises to over an hour in the evenings.

3. Keep a copy of your tax return: If you have filled out and submitted your form properly then it’s unlikely anything will go wrong, but there’s no harm in keeping a copy just in case. The penalty for supplying ‘inadequate accounting records’ can be as high as £3,000, so making a copy of your tax return will give you peace of mind if nothing else.

4. Claim all you are entitled to: Don’t be afraid to claim all of the expenses and allowances to which you are entitled. If you work from home there are a plethora of expenses you may be able to claim on your tax bill, such as heating, lighting and stationary. Failure to do so could see you pay more tax than you legally have to.

5. Ask for advice: Self-assessment can be complex and time-consuming, and simple mistakes can result in hefty fines. Seeking professional advice will greatly reduce the risk of making costly errors, so head to the VouchedFor website to find top-rated advisers in your area.

Top ten mistakes to watch out for

Carol Cheesman of Cheesmans Accountants has outlined the top ten pitfalls to watch out for when completing your self-assessment tax return for HM Revenue and Customs (HMRC)…

Good news: not everyone needs to complete a self-assessment tax return (SATR).

Bad news: for those who do, it’s sometimes not straight forward and there are penalties if you fail to submit your SATR on time, or if HMRC take the view that not enough care has been taken in completing it.

Good news: if you make a mistake on your SATR you've normally got 12 months from January 31st after the end of the tax year to correct it. This is called an amendment. For example, for the 2015-16 return you have until 31 January 2018 to make an amendment.

1. Signature & date missing

To avoid this simple schoolboy error before you start, stick a post-it on the front reminding you to sign and date box 22.

2. Incorrect National Insurance number and/or Unique Taxpayer Reference (UTR)

Life throws a lot of codes and references at us, and which is which can sometimes be confusing. The UTR is a ten digit reference number. It is unique to you, and you will find it on every correspondence you receive from HMRC. Your National Insurance number is also unique to you. It is made up of numbers and letters, and you will find it on payslips or on a P60. Be sure to be accurate when including this information.

3. Ticking the wrong boxes

The paperwork sent by HMRC includes a guide to completing your Tax Return. It’s very clear and takes you through the process step by step.

4. Mañana form-filling

Notes such as Info to follow or As per accounts will not be accepted by HMRC. A SATR with these types of notes is not a completed document and will not allow you to avoid the penalties HMRC can impose.

5. Sloppy arithmetic

At the very least, double check your calculations. It’s important to be accurate.

6. Failing to declare all income/Capital Gains

Failure to declare all relevant income and Capital Gains can result in severe penalties. If those errors are deliberate (for example: omitting a source of income) you could be prosecuted.

7. Forgetting supplementary pages

If you have additional income, you will need to include supplementary pages. This additional income may come from playing in a band at weekends, or perhaps your erotic fan-fiction has become a best-seller, or it could be from investments, property, shares etc. Make sure you include all additional income on the supplementary pages.

8. Claiming the unclaimable

There may be things you assume can be claimed, but in fact can’t. Check with your accountant as there are costly penalties for incorrect claims; and besides, there may be things you hadn’t thought of that can be claimed.

9. Missing the deadlines

Don’t leave things to the last minute. The deadline for submitting a paper SATR is 31 October following the end of the tax year. The deadline for submitting a SATR online is 31 January after the end of the tax year. If you miss these deadlines, there are penalties to pay.

10. Don’t shoe-box your records

The easiest way to ensure completing your SATR is stress-free is to be organised about keeping proper and complete records. The paperwork you will need (where relevant) includes:

· P60, P45 and P11D

· Expense records

· Benefits including maternity/paternity pay, statutory sick pay, job seekers allowance

· Pension records

· Bank statements

· Property income

· Foreign income including evidence of tax already paid abroad

· Capital gains

· Employee share schemes

· Student loan payments

Cheesmans Accountants’ checklist for self-assessment tax returns

If you are self-employed you will need:

· Cash books

· Invoices

· Mileage records

· Receipts

· Bank statements

· Records of all sales and takings, purchases and expenses

· Money taken out of business for personal use (if any)

· Personal money put in to the business (if any)

It’s perfectly possible to complete a Self-Assessment Tax Return without the help of a qualified accountant or tax advisor, but hiring a professional will ease your workload and offer comfort that the submitted forms are accurate and complete.