The tax return deadline is almost here – by midnight on January 31 you should have filed your 2015-16 tax return and paid any tax due.
If you haven’t sorted yours yet, follow our last-minute tax return tips to avoid the fines.
1. If in doubt, file a tax return
If HMRC expect you to file a tax return – because you’re self-employed or you have other untaxed income – you need to do so even if your income is low and you don’t expect to owe any tax.
2. Understand the dates
Tax dates can be a little confusing, so make sure you’re clear. The 31 January 2017 deadline is for self-employed income that you earnt between 6 April 2015 and 5 April 2016, so you need to include your turnover and expenses for this period when you’re completing your tax return.
3. Make sure you can log in
If you have your Government Gateway user ID and password to hand, you can use them to sign in to your online account to file your tax return. If not, don’t panic: you should be able to use the new GOV.UK Verify service to confirm your identity and access your online tax account. Agents will not need this code for submission.
4. Gather your paperwork
Make sure you’ve got all the necessary paperwork together, so that you can calculate important information like your business turnover and expenses. Ideally you’ll have receipts for your expenses, but if you don’t, check your online bank statements instead to get accurate figures.
5. Understand allowable expenses
You can subtract ‘allowable expenses’ from your business turnover to work out your taxable profit, including the cost of things like business travel, stock and business insurance.
You may be given the option to enter your expenses as a single figure rather than breaking them down into separate costs, but you still need to calculate everything properly.
It’s important to understand what can and can’t be included, so check out our article on tax deductible expenses if you’re not sure.
6. File on time to avoid fines
Perhaps you’re dragging your feet when it comes to submitting your tax return because you don’t think you’ll be able to pay your tax bill.
If this is the case, it’s important to understand that submitting your tax return late could cost you much more than failing to pay on time, so don’t miss the deadline for filing.
A late tax return usually means an immediate fine of £100, and then subsequent penalties if you continue to delay. If you pay your tax bill late, you’ll be charged interest on the amount you owe.
7. Seek help online first
If you get stuck when you’re filling in the form, it’s worth looking for help on the web before you call the HMRC helpline. As the deadline nears, the phone lines are often jammed, and you may wait ages to get through.
HMRC publishes comprehensive Self Assessment guidance and help sheets online, so these could be your first port of call.
8. Double-check before submitting
It’s easy to make a mistake when you’re rushing to get your tax return in on time, so check through your figures carefully before you submit. If you do make a mistake, you should be able to log back into your account to correct it.
9. Remember to pay!
Once you’ve filed your tax return, you can give yourself a pat on the back… but it’s not over yet! The deadline for paying your tax bill is the same as the submission deadline, and HMRC won’t take the money automatically, so you need to make a payment. Luckily, there are several ways of doing this, including the quick and easy method of online bank transfer. Then you can really sit back and relax…
10. Tell HMRC if you can’t pay
If you can’t pay your tax bill by the deadline, contact HMRC as soon as possible to let them know. They may be able to give you some extra time, or let you pay in instalments.
11. Look ahead to next year
Since things were all a bit of a rush this year, now’s a good time to get organised for future tax returns. For example, if you’re using your personal bank account for your business, consider opening a business bank account, which should make it much easier to calculate your business income and outgoings.