The online self-assessment deadline for tax returns is just a month away. It falls on a Friday, on January 31, 2020. With the date approaching, HM Revenue and Customs (HMRC) revealed that not even festive celebrations have stood in the way of some people keen to tick it off their to-do list.

Tax return: Who needs to file via self-assessment?

Self-employment continues to rise, Mr Morrison explained.

“However, it’s not just the self-employed who have to complete their self-assessment tax returns, so it is worth double checking if you’re unsure,” he said.

“You must submit a tax return if you have self-employed earnings or have received untaxed income over £1,000.

“You will also have to file if you have generated income from renting out a property, including through Airbnb.”

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How to complete on time and avoid any last-minute surprises

According to HW Fisher, there are five steps to consider in order to file on time without any hiccups.

1. Allow plenty of time to gather paperwork. This includes your P60 which will confirm the total tax you have paid on your income. You will also need a record of benefits and expenses which can be found on your P11D or P9D forms. If you have left a job in the last tax year, you will also need a P45 from your previous employer.

2. Pension contributions: Make sure you keep details of any pension contributions made to allow you to claim the right tax relief for them.

3. Gift aid payments: you will also need details of all your gift aid payments – e.g, have you sponsored a friend to run for charity? This can be included as HMRC provides some tax relief on charitable giving.

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4. Don’t forget to make a copy of your completed tax return and keep a proof of postage, on file. If you are employed or a pensioner, please keep all paperwork for 22 months from the end of the tax year to which it relates to. If you are self-employed or letting a property, you should keep all paperwork for 5 years and 10 months.

5. Personal savings allowance: don’t forget that this can be applied to interest earned on your savings. You could receive up to £5,000 in interest on savings tax-free.

Mike Parkes, Technical Director at GoSimpleTax, a self-assessment tax software, is a former HMRC employee and has also commented on the impending deadline.

He said: “The key is to make the self-assessment process as simple as possible for yourself.

“From knowing when the deadlines are to the right amount you need to set aside for your tax bill. We would urge all self-employed workers to make sure you hit that 31st January deadline – but get started as soon as possible – to avoid any penalties.

“If it’s your first time, check that you have registered for self-assessment and what is required of you to submit. Ensure you have maintained good financial records.

“You will be asked questions about yourself and your financial affairs, so being on the ball with your incomings and outgoings will help to fill in the assessment correctly without getting caught out.

“Expenses can be confusing. You need to work out what are the genuine costs for business and whether it’s an allowable expense or you could be caught out.

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“This could be anything from buying equipment and supplies to travel or finance costs. There are grey areas when an expense is incurred not exclusively for the business – such as a phone contract or mileage.

“On the other side of the coin, there are thousands of people under-claiming on expenses because they’ve not kept track or saved the supporting receipts.

“National Insurance can get confusing. For self-employed people, the return is also used for calculating Class 2 and 4 National Insurance, as well as income.

“You may be reminded to pay Class 2 National Insurance, which even if you’re not required to do so, it’s worth considering voluntary payments to protect your state pension and other statutory benefits.”



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