Many of us have to go through the annual ritual of completing self-assessment tax forms, and not just those of us who are self-employed! These forms delve into a variety of income sources, encompassing PAYE, self-employment, property ownership, dividends, and more. This detailed process calculates your tax liability for the year, offsetting what you have already paid to determine your final tax bill.

While HMRC strives to simplify the self-assessment form, there are a few things you can do to ensure that you have all the details you need to complete it accurately and on time, sparing you from overpayment or underpayment woes.

The Tax Year Key Dates for Self Assessment

A tax year spans from April 6th until April 5th of the following year. For paper-based filers, the deadline is October 31st, while digital submission must be completed by January 31st. You will be expected to pay any tax owed must be paid by January 31st as well. Self-assessment applies to sole traders, partnership members, and limited company owners.

Digital Filing Essentials

To embark on digital filing, the first step is registering with HMRC and acquiring your government Gateway ID. This credential grants you access to an account that you can then use each year.

Self Assessment guide – Assembling Financial Data: The Building Blocks of Your Tax Return

Income Compilation 

Gather all of your income sources for the financial year including all paid invoices, pending sales, business sales relating to your business, and any other sources of income. Keep records of all of these income payments

Specialised Income Segmentation

Isolate any interest earnings and property-related income to be dealt with separately. Find P60s and P11D forms from any paid employment you did throughout the year.

Expense Computation 

Determine your business-related expenses and refer to the HMRC guidelines if you’re unsure about what is allowable. Generally, this includes anything work-related such as travel, software, accountancy fees, memberships and the use of your home. Collate evidence such as invoices, receipts, and bank account statements. Capital expenditures, like computers or vehicles, warrant separate inclusion.

Submission Process: Filing Your Return

Armed with this comprehensive data, you’re poised for submission! You can do this online or use the written form. Once complete, the system will autonomously generate your tax outcome and tell you the payable amount. You must pay this, plus an amount on account by January 31st, offsetting any pre-paid amounts. A failure to adhere to deadlines incurs a £100 penalty. 

Your Step-by-Step Checklist

  • Work out if you need to file a self-assessment and take note of the filing dates
  • Register for the online system and set up your account
  • Add up all of your income for the financial year
  • Keep a record of all income
  • Add up all of your expenses for the year
  • Declare any large purchases or capital expenditure
  • Keep copies of all receipts, statements, and invoices – these can be electronic copies
  • Gather any employment records and forms
  • Find any bank interest certificates
  • Calculate other income from property or shares
  • Select your preferred filing method or ask your accountant to do it for you
  • Finalise and submit your return
  • Pay your tax bill

If you have been careful to keep good records throughout the year, using software designed for this purpose will really help, condensing the process into a single day’s work. Alternatively, your accountant can provide expert support, assuring your self-assessment is precise, potentially saving you from unnecessary expenses.

There is no need to feel threatened by the self-assessment process! When you are armed with comprehensive business records and digital tools, the journey from collating your financial data to submission becomes much less daunting! Entrusting your accountant with this responsibility ensures both accuracy and peace of mind.

Do you need help with your self-assessment?

Get in touch for a chat to see how we can you!