We understand that filing one’s first tax return may be an overwhelming task. If you need to become more familiar with managing accounts, it’s expected to be anxious over making mistakes. At Account Ease, we’ve got you back. Check out the five-point list we’ve created to ensure you’re confident when you file next calendar year’s Self-assessment Tax Return.
It is not getting yourself registered.
To be able to finish your tax return, you have first sign up for Self Assessment service. This can be done through HMRC’s website. HMRC website or fill out this form using your computer and then print it out and mail your completed form back to HMRC. Once you have registered, you’ll be issued a Unique taxpayer reference (UTR) code that you’ll need to file your first and any subsequent tax returns. Therefore, ensure you keep track of it!
Do not claim all of your expenses.
Many people don’t claim the various expenses they incur and pay hundreds of pounds of taxes they don’t need to. Nobody wants to be taxed more than they have! You can claim tax deductions for an array of business-related expenses like travel expenses as well as stationery, advertising, and even training. If you need clarification on what you are entitled to claim as a business expense, look at the HMRC that covers costs for self-employed people. Make sure you keep all bills and receipts related to the fees you claim, as the records can be requested by HMRC up to five years after the date of your claim (6 years for companies with limited liability). The total cost of the expenses incurred is subtracted from your earnings to calculate your final profit, which is the amount tax-deductible.
Not including pay and other benefits from a different job
Are you a superhuman who has several jobs? If you hold an additional position, in addition to managing your own company, you’ll have to add this information to the employment section of the tax returns. First, you need to collect Form P60, which will tell you your total earnings during that tax year, as well as the amount of tax you paid for it. If your employer gives you other benefits, such as the ability to pay for expenses, you’ll also require a P11D form. If you need more of a state, you might need to have a P45 to hand to complete the tax returns if you’ve switched jobs during the tax year you’re claiming.
Not including interest in your account at a bank
In addition to the income and expenses of your business, your tax returns should also contain details of interest paid from all your accounts with banks. This includes interest paid on bank accounts for business or joint bank accounts and personal building society. There are some exceptions similar to ISAs, which have interest that earned is tax-free.
We need to prepare for payment on account.
Have you calculated and budgeted the tax you’ll owe and are now ready to pay? Great! Have you planned for the account payments as well? The account prices are extra tax payments you make towards the tax return. They are due on January 31st, along with your tax bill. The amount you’ll be charged for the cost of the account amounts to 50 percent of the tax you have been due during the year. That means that for your first year, you’ll be paying a 150% tax amount. It’s pretty scary, and if you still need to plan it in your budget, it might be quite a surprise! Then you must make another payment on your account (another 50 percent) to be paid on the July 31st. The good news is that next January, you’ll be required to settle any additional tax to be paid (if your earnings have increased), or you’ll get an amount of money (if your revenues declined).
Not including any additional pages
You’ll need to add extra pages for earnings not covered on the tax return.
Additional information could include:
- In the case of gilt-edged UK securities, heavily discounted securities, and accrued earnings
- Gains from life insurance
- Stock dividends, non-qualifying distributions, or closing company loans written off
- Post cessation receipts
- Earnings from share schemes
- Foreign payments aren’t tax-deductible in the UK
- Taxable lump sums derived from overseas pension schemes
- Certain employment deductions
- An entitlement to an age-related Married Couple’s Allowance
- Other tax reliefs that aren’t included in the central portion of your tax return
- Loss relief claims
- Property-related income
Not including the correct National Insurance (NI) and Unique Tax Payer Reference (UTR)
They must be accurate. The UTR is an identifier with ten digits specific to you and appears in any correspondence with HMRC. It’s crucial to include these numbers and ensure that they are correct.
You need to submit your tax return on time.
The deadline for filing the paper tax return is October 31st, following the close of this tax season.
The deadline to file the tax returns online will be January 31st, following this tax season. Therefore, a tax return for the tax year 2023/24 is required to be filed online before January 31st 2024.
If you fail to meet the deadline, you’ll have to pay penalties, which will increase as you wait. More information on the tax deadlines for self-assessment, along with fines, is on the page on the HMRC website.
Not keeping accurate and complete records
You must keep up-to-date and precise documents (if they are pertinent)
- P60, P45 and P11D
- Records of expenses
- Benefits such as maternity/paternity leave as well as statutory sick pay. allowance for job seekers
- Pension documents
- Statements from banks
- Property income
- Foreign income and evidence of taxes already paid overseas
- Capital gains
- Employee share schemes
- Student loan repayments
If you are self-employed, you must keep the business records, including:
- Cash books
- Recordings of miles
- Statements from banks
- Record all sales, takings, purchases and expenditures
- Money taken from company to use for personal purposes (if there is any)
- Private funds put into the business (if there is any)
What should I do when I make a mistake in my self-assessment taxes?
If you make an error on your tax return, you generally have twelve months from the submission deadline to rectify it. This is known as an “amendment’.If you want to fill out your self-assessment tax return, do not hesitate to contact us at Account Ease or phone our number at 0208 133 4599.