Self Assessment tax advice: 6 tips to make your tax filing less stressful
Running your own business and being your own boss might sound attractive. But when it comes to managing your finances and accounting, it’s all too easy to make mistakes. According to HMRC, more than 1 million people missed the Self Assessment tax return deadline 2024 and must pay penalties for late filing.
Navigating tax legislation and keeping track of income and expenses, especially when self-employed, can be overwhelming. While filing a Self Assessment tax return without errors might be daunting, with the right approach, meticulous planning, and adherence to HMRC guidelines, you can make the process less stressful.
Top 6 Self Assessment tax advice tips you can follow
Make your tax filing stress-free with these Self Assessment tips, and file your tax return without errors before the tax deadline.
1. Plan ahead
Calculating your Self Assessment tax return in one go can be stressful. Proper planning is one of the most critical parts, and it is advisable not to wait until the last minute to collect all the documents that fit the Self Assessment checklist.
Give yourself ample time to understand the tax filing requirements, keep track of your income and expenses, and familiarise yourself with your tax deductions and the associated paperwork required. Plan your tax return in plenty of time ahead of the Self Assessment tax return deadline and spread the work throughout the year to avoid last-minute stress and errors.
Balance your accounts and bookkeeping records at month-ends or quarterly to ensure the accuracy of your transaction records. This will provide you with ample time to spot any mistakes in recording.
Many people forget you can start your Self Assessment as soon as the financial year ends on 5 April.
2. Don’t forget the Self Assessment tax return deadline
Missing the deadline to pay for Self Assessment is not an option for you, as HMRC charges fines and penalties for late payments. Below are the deadlines for Self Assessment tax returns you must remember.
- If you file a paper Self Assessment tax return, you must submit it by 31st October.
- The deadline for submitting an online Self Assessment tax return is 31st January.
- The deadline for the final payment of tax owed for the financial year is 31st January.
Note these dates on your calendar so that you can plan your tax filing process to avoid late filing penalties and last-minute stress. If you fail to pay tax returns for up to three months, you must pay a late filing penalty of £100.
HMRC will charge you a penalty of £300 if you haven’t filed tax returns after another 90 days. Missing the deadline is one of the critical Self Assessment tax advice that everyone must remember to avoid paying a hefty amount to HMRC.
3. Early registration
If you are a first-time taxpayer, the first step is to register yourself online. Obtaining a Unique Taxpayer Reference (UTR) is very important, and you should use that same number for every tax return going forward.
However, the registration process is straightforward and can be done online on the HMRC website. Early registration helps you access your Self Assessment account before the deadline, and you might address potential issues beforehand. Always remember that HMRC will not accept late log-in as an excuse for missed Self Assessment tax return deadlines.
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4. Organise your records
Organising your income and expense records beforehand will make your tax filing process more efficient. Gather all your necessary documents, such as property rentals, savings interest, employment income records, payslips, invoices, receipts, and bank statements in advance.
Doing this will help you avoid potential errors and claim all allowable expenses. Keep all tax-related documents in a separate folder on your computer or upload them to the cloud to find them easily during tax return preparation.
Either use accounting software or keep your transaction records in a separate business bank account, which will help you streamline your Self Assessment tax returns process more smoothly and accurately.
5. Check for common errors
Review all aspects thoroughly to improve the accuracy of your Self-Assessment tax returns. Take your time and plan your tax return carefully beforehand to avoid any penalties for wrong information. Below are a few common errors to look for:
Incorrect personal information: To avoid a tax processing delay, provide accurate personal information, such as your national insurance number, name, and address, so the data matches HMRC.
Missing information: To avoid penalties from HMRC, ensure all relevant information, such as allowable expenses and transaction records, is correct. Carefully review your income and expense sources and make sure you mention accurate information when filing Self Assessment tax returns.
Incorrect calculation of income: Always double-check your allowable deductions and take your time to calculate accurately.
6. Keep informed about changes in tax law
Tax regulations are subject to change. Whether you are a seasoned filer or a first-timer filing Self Assessment tax returns, staying updated about tax law changes is essential. Changes in National Insurance contributions, income tax rates, and personal allowances will considerably impact your tax liability.
Staying up-to-date about tax laws will help you accurately report your deductions, income and tax obligations while ensuring compliance with tax regulations. Ensure you stay updated with HMRC publications, government announcements, and tax websites.
Self Assessment tax advice from professionals
By following the above Self Assessment tips, you can efficiently streamline your tax return process. Making Self Assessment tax return filing a breeze requires attention to detail, patience, proper planning, and understanding tax laws. You might be thinking about how to complete a Self Assessment tax return in time without paying penalties. Don’t let the Self Assessment tax return season be stressful; take control, become organised, and maybe get help with Self Assessment.
At Affinity Associates, our experienced tax advisors will provide comprehensive Self Assessment support, from gathering your transaction records to filing your tax returns on time and claiming all the deductions you are entitled to.
Book a consultation with us and make your tax planning effortless.
