It is January once again and we are fast approaching the Self Assessment deadline for filing your 2009-10 tax return (31 January 2011).
I have put together a list of things to consider when completing your tax return. Whilst this is not a comprehensive list, it will hopefully provide a helping hand.
1. Check whether you need to complete a Self Assessment tax return. If you have run a business, either as a self-employed person or as a director, you will have to submit a tax return. Yes, even if you earned less than the personal allowance. You’ll also need to complete a return if you received income (above set thresholds) on savings, investments or property.
2. Do not leave it until the last minute. If you need to submit a tax return, you’ll need to register online at www.hmrc.gov.uk before you can file a return. You will also need the following details to hand – your Unique Taxpayer Reference (UTR), national insurance number and post code. If you do not have these , HMRC can provide these, but it will delay your filing. Make sure your register before21 January, as this is the latest date for registering to ensure you will be able to meet the 31 January deadline.
3. If you are late with your filing you are likely to be charged with a £100 fine.
4. Use your losses. If you have submitted Self Assessment returns previously – make sure you take into consideration any prior-year losses. These losses should be offset against any profit made in the current tax year.
5. Ensure that you include all your income received in the tax year. It is important to disclose all income such as rental income, capital gains, dividends from shares and bank interest received. However, remember that interest received on certain national savings and ISA accounts do not need to be disclosed on the return.
6. Do not round-up figures. HMRC have said that this can indicate that a person’s affairs have not been properly maintained and could trigger a further enquiry.
7. Remember to deduct all eligible expenses. HMRC allow individuals to take into account certain costs, such as student loan repayments and personal pension contributions, deduct when preparing their Self Assessment return. Remembering to include these costs, can make a considerable difference to your tax bill.
8. Ensure that you claim for all business expenses and capital allowances. If you forget to deduct business expenses you get hit by a double whammy – not only do you end up paying for these expenses out of your own pocket, your tax bill will increase as well.
9. Start saving now. Do not forget that you will have to pay half of this tax year’s tax bill as a payment on account on 31 January (i.e. the same time as you pay your 2009-10 tax bill). However, if you know that your circumstances have changed since last April, you should consider notifying HMRC, as it may be possible to decrease any payment on account for the 2010-11 tax year.
10. Get professional advice. If your affairs are complicated, consider getting advice. DIY tax returns can end up being a false economy.
Good luck with your Self Assessment return!
Metric Accountants does not take any responsibility for losses incurred after acting on the above information and suggests that individuals seek professional advice.
