Don’t panic, you’re not alone! And here to help is a list of top-tips, devised to get through your assessment correctly and submitted on time.
Making lists? Understand what it is that you’re required to disclose. The type of information you submit is dependent upon your business, whether you’re a sole-trader or have a limited company. Self-assessment is not the same for limited companies.
Know your limits: If your tax affairs were straight forward, you will only need to complete the ‘short’ version of the assessment form, which is just a few pages long.
It’s not only about what you receive: Some expenses are obvious but remember that you can include certain ‘personal’ costs such as use of your home, items that are legitimately deductible and are invaluable in your return. Other outgoings, pension contributions for example, may not be allowable as expenses but can still give tax relief so ensure they are reported in the right place.
Rental income received from a property you let out is deductible and should therefore be declared. Further, not only can you claim for the annual income, which should be relatively easy to calculate, you can also claim mortgage interest and a reasonable ‘wear-and-tear’ allowance against the property, as well as any other bills incurred for maintenance and repairs.
Lost touch? In the event that you find any receipts, invoices or other paper work have been mislaid, there’s a very good chance that the information can be obtained via a simple phone call or online conversation.
A hangover is not a good excuse for making mistakes and could lead to more pain in the form of penalties. Wherever possible, exact figures should be used to make calculations however if these are not possible, realistic estimates should be included. And remember, while these will suffice in the first instance, exact figures will be required at a later stage.
Pay slips can be vital. In the absence of a P60 from your previous employer, the majority of the information will be contained in your pay slips, especially the last one for the year. Similarly, bank statements can be invaluable to show pension contributions, charitable donations and other outgoings.
No cash left for the New Year? For liabilities under £2,000, if you are an employee the amount owed can be collected directly by HMRC through your tax code in the next tax year, rather than you having to pay it as a lump sum on 31 January- provided you file by 31 December. Don’t overlook the need to include Student Loan Repayments in your calculations, especially if you have income from both a job and other sources.
Tim Walford-Fitzgerald, senior tax manager, chartered accountants, HW Fisher & Co.