Tips for Tax Self-Assessment

The most stress-free way to file a tax return is to have somebody else do it for you. Accountants Conwy can deal with sifting through your paperwork and making sure nothing has been missed by accident and you can relax knowing your taxes are in the hands of a qualified expert.

Here’s how to make the process of filling out your self-assessment form easier. From getting confused by expenses to choosing the wrong form to fill out, here are some common mistakes to avoid.

Not Applying for a UTR Number

In order to file your tax return, you need a UTR (unique tax reference) number. This is a bit like a National Insurance number, it’ll stay with you for life - but you need to apply for it before your first tax return.

Overlooking Key Documents

Aside from your UTR number, you also need your address details, date of birth and your National Insurance number. Before even trying to fill out your form make sure that you have all the paperwork you need to hand. This includes: a P60 form from your employer showing your income and the tax you have paid on it; a P45 if you have left a job within the tax year; a P11D or P9D detailing benefits and expenses; plus details of interest on bank or building society accounts, dividends from investments and any other income you receive.

Once you’re done with your tax return, don’t throw away anything - you’re required by law to keep your records for a minimum of six years. It might even be worth keeping them for 20 years, as this is the limit for HMRC to launch an investigation if it suspects fraud has been committed. 

Calling HMRC

If you want to hold on to your sanity during this already stressful period, avoid calling the taxman. Research conducted by the Public Accounts Committee found that HMRC answered only 50% of phone calls. Over a third of those people whose calls were answered had to wait over five minutes for someone to pick up.

Avoid that unnecessary stress by looking online for the answers to your queries. HMRC’s website should be able to answer most of your questions. It has videos explaining everything from how to register to work out your expenses.

Inefficient Filing

If you’ve spent hours hunting the house for essential paperwork, fretting about long-forgotten savings accounts or worrying how you are actually going to pay the final tax bill, take steps now to avoid having the same stress next year. Put those lessons into practice now to make life easier for yourself and your business next year. Create a spreadsheet to detail your income and expenses and update it weekly, monthly or even quarterly. Keep files full of bank statements, bills and important forms so you can find them easily.

Failing to Claim Expenses

It has recently been reported that people who pay tax by self-assessment end up paying £355 too much tax due to falling to claim all the expenses that they are entitled to. These can of course differ depending on whether you’re employed or self-employed. 

If you are employed, you might be entitled to claim for things like the upkeep of your work uniform, expenses incurred due to business travel and some of the costs of working from home. You can claim for working from home, as well as costs associated with running a business premises, paying your employees, plus travel and accommodation costs for business trips and vehicle usage. 

While receipts will be required for making most of these claims, others - including vehicle expenses and working from home - can simply be claimed at a flat rate without having to show receipts for every single transaction.