If you're recently self employed, you might not be aware that the deadline for filing a paper return is this month on 31 October. We thought it would be useful to invite Mike Parkes from GoSimpleTax to explain how best to prepare for the self assessment tax return submission and file with confidence.
Newcomers to submitting the self assessment tax return, should know that there are three ways of filing. Firstly, you can submit your return via the HMRC site and receive instant acknowledgement once you post your submission. You can also use commercial software to do this for you. Or, you can send a paper tax return to HMRC in the post.
Whichever method you choose, it's important to understand your exact responsibilities. For those who are self employed sole traders or landlords letting out UK property, paper submissions can be complicated as they involve additional forms and documentation.
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1. Be conscious of the deadline
Should you choose to file a paper tax return, don't forget to file before the 31 October deadline. We would recommend sending your paper submission prior to the October deadline, either through recorded delivery or with some proof of posting in order to prove your compliance.
If you miss the deadline for submitting your paper return, don't be tempted to file it late – you have until 31 January to complete a return online. Just don't submit both. You will be charged penalties from the 1 February for any late submission.
2. Organise supplementary pages
Remember, it isn't enough to submit the main SA100 tax return. You need to bundle it together with the rest of your documentation if you need to submit supplementary pages. For example, forms detailing your property or self employment income.
For any income you make as a landlord, all that's required is that you also file the additional form (SA105) and submit it alongside your regular self assessment tax return.
However, with self employment, the additional sections required of you could be either the SA103S or the SA103F. The difference between the two is that the former is for those who had an annual turnover below the VAT threshold for the tax year (£85,000 as of 2019/20), and the latter is for those who earn above the VAT threshold.
3. Be open to online and prepare for Making Tax Digital for income tax
While you may have always submitted your tax return by paper in the past, the vast majority of tax returns are now submitted online. Improvements in technology and the extra three months to file are the main incentives to submit an online tax return.
Having an online account with HMRC allows you to extend your filing deadline and check your details at any time to see how much tax is due and act accordingly.
If you're happy to tweak the way in which you keep your records and adopt digital record-keeping, this will help minimise your admin burden even further. It will also enable you to submit your tax returns and automatically calculate your tax.
Going forward, as of April 2023, you will have to file your self assessment digitally to HMRC providing updates every quarter via your digital platform.
Preparation is key. Adopt the right approach now it could save both time and money by making the move to digital ahead of the deadline for MTD for income tax.
Sponsored post. Copyright © 2020 Mike Parkes, GoSimpleTax - tax return software that can help you manage your self-assessment.