As the end of January approaches, residents of the United Kingdom will prepare to pay the tax they owe for the last tax year. The deadline to register for self-assessment was in October and it is likely that you have already registered if you are self-employed or a sole trader.
As the day to pay your taxes approaches, you may have several questions about the process and the steps you are required to follow and these self-assessment tips and advice on filing your tax returns will be of use to you.
- Most of us find tax to be a complicated system and the fear of penalties makes us turn to tax consultancy services. While an accounting firm in London can give you a better idea of the system and documentation you should file, Her Majesty’s Revenue and Customs or HMRC has simple and clear instructions online.
- One of the most useful pieces of advice given with regard to filing tax returns is to make an effort to understand the system and the process. Since self-assessment tax returns are not a one-time affair, the time you spend studying the system will not go to waste.
- The HMRC uses the self-assessment system to collect income tax. In the United Kingdom, taxes are deducted from wages, savings, and pensions. This is done automatically. However, people and businesses with other income are required to report it in a tax return.
- Persons required to file tax returns include those self-employed as sole traders who earn more than £1,000. An individual in a business partnership may also be required to send a tax return, as may persons receiving money from renting out property, tips and commissions, foreign income, or income from savings, investments and dividends.
- If you do not know if you are required to file tax returns, it is recommended that you speak to a business advisor London. Once you are sure you are required to file tax returns, keep in mind that you must file it in on the end of the tax year, which is April 5.
- If you did not file an online return last year, you will need to register first. The HMRC recommends allowing up to 20 working days for this. The registration procedure you must follow depends on if you are self-employed or a sole trader, not self-employed, or if you are registering a partner or partnership.
- There are two ways of sending your tax return. One method is to file the self-assessment tax return online, which you can do if you are self-employed or if you are not self-employed but still need to send a tax return.
- The online service can also be used to view previous tax returns, check details, and print tax calculations.
- If, for some reason, you do not or cannot file your self-assessment tax returns online, you can also do so by post.
- It is recommended that you have with you all documents required when filing your tax returns online or sending them by post. This will not only save you a lot of time but it will also make the process go smoothly.
- The records you should keep at hand include receipts and bank statements.
- A tip that any business advisor London would give regarding tax returns is to always keep track of the deadlines. Missing a deadline can result in penalties and HMRC says that a person must pay interest on the amount they owe until it is paid off if they do not pay their tax bill on time. However, there are payment plans you can arrange with HMRC if you cannot make the full payment by the deadline.
- The payment deadlines to remember are January 31, when you are required to make a payment for the previous tax year and your first payment on account, and July 31, when your second payment on account is due.
- If the deadline falls on a weekend or bank holiday, your payment should reach HMRC on the last working day before the deadline. This applies to all payment methods except Faster Payments or debit or credit card.
- While you can no longer pay at the post office, same day payments can be made through Faster Payments, CHAPS, debit or corporate credit card, or at your bank or building society.
- Bacs and cheques take three working days, as does Direct Debit if you have set one up with HMRC before. If not, it can take five working days.
