How to reduce your self assessment stress

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Date: 14 December 2020

A man relaxes in front of the fire as the self assessment return has been completed

** Updated 25/01/21 HMRC have updated their guidance to state they will not be issuing fines for late self assessment tax return submissions until 28 February 2021. However, the deadline of 31 January remains for payments. Late payments will incur interest at 2.6%. HMRC are urging customers to file their self assessment as soon as possible to avoid any last minute problems and to allow sufficient time to apply for a Time to Pay arrangement to pay their tax bill should it be required.  

Dreading the January self assessment deadline? If you're a self-employed sole trader, we're going to guess that the answer is yes – unless you've managed to file your self assessment tax return already…

Getting this monumental task completed early is no mean feat. But it is possible to get through the tax season without experiencing a stressful sprint to 31 January.

"How?" you may ask. Mike Parkes from GoSimpleTax shares some simple tips that will leave you feeling as chilled as Frosty the snowman.

1. Gather the main information you need

Don't leave it until the last minute to gather all the information and data you will require. Make a checklist of everything you need so you can complete the tax return without unnecessary hassle and delays. We have created this template that can help.

Self assessment documents and information checklist
Documents/Information Found Need to Find
National Insurance number    
Unique Tax Payer Reference (UTR)    
Business/partnership name, address and company number (if applicable)    
P45    
P60    
P11D    
The business’ annual income and expenditure    
Income earned from other employment    
Rental income    
Interest paid on loans, credit cards or other credit    
Income from overseas    
Income received from a partnership    
Any dividends received    
Benefits received from the state or an employer    
Capital gains received    
Gift Aid received    
Pension contributions    
Tax payments already made (payments on account)    

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2. Get your accountant to register

If your accountant or bookkeeper will be filing your return, ask them to sign and register the 64-8 form sooner rather than later. This will get them officially recognised as your agent by HMRC and will allow them to act on your behalf.

3. Check if you need any additional information

You have your checklist of the standard data most sole traders will require, but you may require extra information. Perhaps you have a student loan. Maybe you (or your partner) are claiming Child Benefit. If there's the slightest possibility your circumstances will affect how much tax you need to pay, you should be ready to declare it and make sure you have the relevant records or paperwork.

4. Be aware of possible penalties

Submitting your self assessment tax return after the deadline will bring with it penalties. So, keep an eye on the date, leave plenty of time to complete the return, don't underestimate how long you will need and make sure you're ready provide all the necessary data to ensure you avoid any penalties.

5. Check for mistakes now

It’s possible that, when you have gathered your information together, you may have missed something out or made an error. Once you’ve collated everything you need, look through it as soon as possible. You’ll want to guarantee that it all adds up and nothing has been inadvertently excluded.

6. Minimise errors with tax software

The chances of making a mistake can be drastically reduced by using self assessment tax return software. It will take much of the administrative work off your hands and will ensure your numbers all add up.

7. Think ahead for Making Tax Digital

With the next phase of MTD being rolled out for self employed businesses and landlords with income above £10,000 from 6 April 2023, now's the time to consider moving to a self assessment software package if you haven't done so already. Tax return software offers a range of handy tools including income tax calculators and submissions tool for your business making the whole process much easier. These tools also give you full visibility of your tax liability in real time and allow you to make and review your pension contributions and investment opportunities.

Sponsored post. Copyright © 2020 Mike Parkes, GoSimpleTax - tax return software that can help you manage your self assessment.

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