It's a job that many people put off until the last minute but – like it or loathe it – there's no escaping the looming deadline for submitting your self assessment tax return.
The deadline for filing the 2018/19 return is midnight on 31 January 2020. There is an automatic £100 penalty for anyone who files late – even if there is no tax due or if you are due a rebate.
Around 11 million of us have to complete a self assessment return for a variety of reasons. While most people have their tax automatically deducted from wages, pensions or savings, the self assessment process ensures that any additional tax is paid to HMRC. This could be because you've received untaxed money through self-employment, rental properties, inheritance or capital gains.
Once the return is completed, HMRC will calculate any monies due in respect of income tax, classes 2 and 4 National Insurance Contributions (NICs), capital gains tax and High Income Child Benefit Charge liabilities. Any amounts owed must also be paid by the 31 January deadline.
Last year, almost three quarters of a million people failed to meet the January deadline, according to HMRC. Yet some taxpayers were impressively organised, with over 3,000 returns filed on Christmas Day 2019!
To complete the return, you'll need details of any untaxed income from the tax year ending 5 April 2019, including income from self-employment, dividends and interest payments. You should also have a record of any allowable expenses you've incurred from self employment over the tax year; these expenses will be deducted from your profit to ensure you only pay tax on the remaining amount. Although you don't have to submit proof of these expenses when you file the return, it's crucial you do have evidence to hand should HMRC choose to look into your accounts further.
If you feel daunted by the self assessment process, or simply don't have time to fill out the return yourself, you can ask a qualified accountant to act on your behalf. Here at Perrys, we have all the expertise required to make this a painless process. With seven branches across Kent and London, we specialise in offering taxation planning and advice for both businesses and private individuals.
For more information, please don't hesitate to get in touch.