If you are required to submit a 2020/21 Self-Assessment Tax Return to HM Revenue & Customs (HMRC), you only have a matter of weeks left to do so online.
The clock is ticking –, fail to meet the 31 January 2022 deadline and you could face fines.
An important point to remember this time around is that the 2020/21 tax return encompasses earnings and payments received during the pandemic, including any taxable grants or payments awarded under COVID-19 support schemes up to 5 April 2021.
Don’t leave it too late
Leaving preparation of your tax return too late is risky, particularly if you don’t have a knowledgeable accountant preparing it for you. With added time pressure, you are more likely to make mistakes or overlook important information that HMRC want to see.
Errors in your self-assessment tax return could prevent you from being able to properly plan for your liabilities, since calculations may be carried out using incorrect or inaccurate information.
Keep on top of bookkeeping
We cannot stress enough the fact that, when the tax year ends on 5 April, there is nothing to say that you cannot begin preparing to submit your self-assessment tax return right away!
If you amass information throughout the year and diligently stay up to speed with your bookkeeping, you will save time when it comes to filling in your return.
Knowing what is going in to your tax return early on in the process can also be useful in that, if you stumble upon any anomalies or if any queries arise and you need to get in touch with HMRC, you have plenty of time to do so and won’t be joining the tail end of a long telephone queue on 31 January.
Have the details to hand
No matter your circumstances, if you need to submit a self-assessment tax return, you will need to have the following to hand in order to do so:
- A Unique Taxpayer Reference (UTR) number (if you have not completed a Self-Assessment tax return before, you will need to register to receive one of these)
- National Insurance (NI) number (if issued)
- Details of all your income; for example, if you have additional rental income, have earned bank/building society interest, or have received dividend payments
- Records of relevant business expenses
File your return online
If you are still completing your self-assessment tax return on paper and you have been wondering about filing it online for the first time, bite the bullet and make the switch.
Registering to file online means you can more easily supply HMRC with the information it requires, simply by uploading it. Filing online doesn’t mean you have to complete the form in one sitting – you can save your submission at any point and return to it when you have the time. Just remember to submit before the deadline.
Record income and expenses
Keeping accurate records of any income and what you have claimed as business expenses throughout the tax year will make completing your return far easier. Depending on your circumstances, you may need access to:
- Bank statements
- Chequebooks and paying-in slips
- Credit card statements
- Sales invoices/till rolls
- Job quotes or estimates
- Purchase invoices and expense receipts
- Payroll records
- VAT records
If you are on the lookout for an alternative solution to retaining lots of paper records, it may also be worth thinking about if and how you could use the latest cloud accounting software to your advantage.
Taking your record-keeping online could help you to cut back on the physical paperwork you have lying around and to automate much of the bookkeeping function. It will also place you in a good position for reporting to HMRC under making tax digital (MTD) if you do not already make your submissions to HMRC in this way.
Budget for your liabilities
Once your self-assessment tax return has been submitted, you should be in a position to budget for your tax liabilities and get ahead if you need to make payments on account.
Engage an accountant
Every year we support hundreds of clients during Self-Assessment season, ensuring that their tax affairs are handled quickly, efficiently and compliantly.
If you would feel better entrusting us with the preparation and submission of your self-assessment tax return, contact us to discuss your requirements.