Knowing how to prepare for a self assessment tax return can save you a lot of headaches as you reach the end of your financial year. In this article, we take a look at six simple tips for self assessment tax return preparation that will make the process easier for you.
Get organised
Completing an accurate tax return requires that you have the right accounts, documentation, and other essential information to hand. This can include some or all of the following:
- details of income and expenditure
- National Insurance number
- Unique Taxpayer Reference (UTR)
If relevant, you may need some tax forms from your former employer or the Department for Work and Pensions (DWP) concerning other income earned in the tax year. These could include:
- P60 from your employer to demonstrate PAYE income earned
- P45 from your former employer, if you have left them in the previous year
- P11D or P9D if you have claimed any benefits or expenses in the last year.
On top of the figures for income and expenditure, it helps to have the invoices and receipts relating to each, in case you need to refer back to them.
Perform mini-assessments throughout the year
Calculating your tax return in one go can be a daunting process. By balancing your accounts at the end of each month or quarter (whichever is preferable) you can ensure your recorded income and expenditure tallies with your business bank account. This makes it easier to spot any errors in recording early on and ensure that your final year-end tax return is as accurate as possible.
Set up your account in good time
Don’t leave setting up your HMRC account until the last minute. By doing it early, you can take your time completing the process and gathering the information you require. Trying to rush everything leads to errors, which can result in penalties from HMRC.
Complete your tax return ASAP
While you have until 31 January each year to submit your return for the previous tax year, it makes sense to submit it earlier. The sooner you submit, the sooner you know what your tax obligations are for the year. Likewise, you avoid risking a late submission penalty for missing the deadline by getting things sorted in good order.
Make sure you claim all your expenses
As a self-employed business person, you can claim any expenses incurred wholly and exclusively for the purpose of your trade. While the online submission process will prompt you for some of these expenses, knowing what you can claim ahead of time means you will not be overcharged for tax.
Check and double-check your tax return
Avoiding making unnecessary mistakes is the key to a successful tax return. Use accurate records for which you have all the relevant documentation. Take your time when calculating your income and expenditure and, above all, ensure you declare all income and do not try to claim expenses to which you are not entitled
Self-Assessment Tax Return Tips: Final Thoughts
Even with these tips, preparing your tax returns is still a lot of work. If you’re concerned about finding the time or making mistakes, why not get your accountant to do it for you? Here at PPG Accountants, we have a range of self-assessment tax return services and help self-employed clients across Dudley and Stourbridge with every aspect of the tax returns. Contact us on 01384 255 110 or send an email to info@ppgaccountants.co.uk to arrange a free consultation with one of our experts.
