Tax & admin · 11 January 2018

Five last-minute tax tips to beat the self-assessment deadline

HMRC is believed to be challenging more claims for inheritance tax relief
There is still time to get your tax return in order and submitted to HMRC by the end of the month

To help readers prepare for the imminent self-assessment deadline on 31 January, Emily Coltman, chief accountant to cloud accounting software provider FreeAgent, offers five essential tips for making sure submissions reach the tax office on time.

Each year, millions of small business owners across the UK have to file a tax return. But, if you still haven’t got round to starting yours yet, you may be getting anxious about whether you’ll be able to actually complete everything in time for the 31 January self-assessment deadline.

Don’t despair. The good news is that there’s still time to get your tax return in order and submitted to HMRC by the end of the month. Here are five top tips for completing your self-assessment in the final weeks (or days) before the deadline passes.

  1. Register ASAP

If this is your first year of filing, you must register your business with HMRC before you can start the self-assessment process. You’ll also need your activation PIN and Unique Tax Reference (UTR) to actually complete and submit your tax return.

If you haven’t done this yet, move quickly. HMRC can’t send you this information over the phone (only by post) and it can potentially take a week or more for them to do, which means you’ll risk being unable to file by 31 January if you leave it too long to register.

  1. Don’t leave anything out

You have to include information about any money you’ve received, or earned, from pretty much anywhere, in your self-assessment tax return. This includes:

  • Your P60 showing salary and tax for the year to 5 April 2017 (if you have a job and are paid wages – even if you’re a director of your own limited company – your employer should have given you this form). If your employer also gave you a form P11D showing any expenses or benefits you received, you’ll need this too.
  • Interest on any bank account(s) during the tax year to 5 April 2017 and how much tax was taken off this. However, this does not include any ISAs you may have (because interest on an ISA is tax-free) and, unfortunately, you also won’t be able to claim tax relief on bank interest you had to pay on a non-business bank account.
    • If you’re the director of a limited company, make sure you don’t put interest on the company’s bank account into your own tax return – that goes on the company’s tax return.
  • If you’re a sole trader, or in partnership, you need to know your business’s income and expenses.
  • Any dividend income on shares you own, whether these are in your own company or another.

Get more assistance to help meet the self-assessment deadline:

  1. Don’t break the rules

There are many complex rules and regulations to adhere to when it comes to business tax, so make sure you’re up to speed with these before you start filling out your tax return.

In particular, be careful when adding up your income and expenses for your sole trader or partnership accounts – because unless you use the cash basis, you have to count income depending on when you did the work, not when the customer paid you.

Also make sure that you understand the rules surrounding business expenses and what you can (and can’t) claim – especially with regard to food and drink, entertaining, travel, accommodation, clothing and the business use of your home.

You can do this by checking your proposed expenses against the info on HMRC’s website, or use another source of information for sole traders, partnerships and limited companies.

  1. Double check your data

Make sure you complete every section of your tax return correctly and leave plenty of time to thoroughly double-check all of the information before you submit it. A single, simple mistake or omission (such as not ticking the confirmation box at the end) could result in your tax return being rejected by HMRC and you being fined.

If you don’t feel 100 per cent confident in submitting your tax return, you may also choose to speak to a qualified accountant who will be able to check it for errors.

Just bear in mind it can be very expensive to hire the services of an accountant at this very late stage – so be prepared to pay a high premium if you have to find one from scratch.

  1. Don’t panic

If you find yourself struggling to complete your tax return on time, don’t rush. Remember that if you miss the deadline, the worst that can happen in the first instance is that HMRC will fine you £100 for failing to file on time and also charge interest for paying your tax late.

You won’t have HMRC on your doorstep or face prosecution by the authorities – and you can still submit your tax return after the deadline has passed.

But don’t get lulled into a false sense of security. HMRC starts increasing the penalties for late filing if you leave it too long, and there are also additional charges and interest to pay when it comes to actually paying your tax bill late.

Dawdle too long and those penalties will quickly start to add up.

Emily Coltman FCA is chief accountant to FreeAgent, which makes award-winning cloud accounting software for freelancers, micro-businesses and their accountants

Will this be your first ever tax return? Read our separate guide for first-time tax payers

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ABOUT THE EXPERT

Emily Coltman is chief accountant to FreeAgent, provider of cloud accounting software for freelancers, micro businesses and accountants. She is passionate about helping the owners of small and growing businesses to escape their “fear of the numbers” and she translates small business finance and tax into practical common sense speak.

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