0800 140 4644
We all put off unpleasant jobs, especially with Christmas just around the corner. But while you’re buying your last minute presents or carving the turkey on Christmas Day, is there a niggling thought that you should be doing something important?
Yes, ‘tis the season for completing your 2016-17 self-assessment tax return and making payment of any tax due before the 31 January deadline.
Whether you’re an experienced owner/manager of a small to medium sized enterprise (SME), a sole trader facing your first tax return, or a retiree with multiple forms of income, it’s always tempting to put the chore off until the last minute.
However, like many chores, it’s never as bad as it seems and you’ll get a warm pre-Christmas glow when you’ve hit the “submit” button and the job’s done.
At Black and White Accounting, we like to help people with their tax returns, so here are our seasonal thoughts on the subject.
Who needs to complete a self-assessment tax return?
If you’re an employee on Pay As You Earn (PAYE) and with no other sources of income, you don’t need to worry about self-assessment forms. However, if you have any other income, perhaps from a buy-to-let property, bank interest or dividends from investments, then you must submit a tax return.
For more information, you can refer to the Gov website for Self Assessment Tax Returns.
Many of our customers are SME owners or sole traders and they all have to declare their earnings so that HMRC can work out how much tax they owe each year.
Congratulations, you’re paying more tax – now get an accountant
If you suspect your tax bill is going to be significant this year, then well done – it looks like your business is really taking off and you’re making money.
In that case, it’s time to hand over to an accountant. You may not like the idea of paying for a professional accountant but here are a few things to consider:
- A good accountant can save you more than they cost;
- Your time is valuable and better spent making money, not digging out old receipts;
- You have peace of mind knowing the job is done in plenty of time and correctly; and
- An accountant has a wealth of business experience and can advise you on your business strategy.
We pride ourselves on the long term relationships we build with our clients, getting to know their businesses inside out so we can offer a full range of business services.
Filing your tax return late
Last year, seven per cent of self-assessment tax payers, that’s 840,000 people, were late submitting returns.
If, for some compelling reason such as a computer failure or a personal tragedy, you do miss the 31 January deadline, contact HMRC as soon as possible and explain your circumstances.
HMRC deals with appeals on a case-by-case basis and we find they can be reasonable so long as you communicate. The thing to avoid is putting off the problem in the hope that it disappears; this just leads to a bigger fine:
- £100 penalty for the first 3 months;
- 5% of tax due if more than 30 days late;
- £10 penalty per day, if more than 3 months late (£900 max)
- 5% of tax due if more than 6 months late, or £300 if greater
…and it just gets worse!
31 January is also the deadline for paying tax and if you’re more than 30 days late with that, you’ll be charged 5% interest and could face court action – that’s a letter from HMRC no one wants to receive. Don’t wait for that brown envelope to come through the door!
However, if you’ve already missed the 31 October deadline for posting your paper tax return, do not send it in late and incur a fine. There’s still time to register for self-assessment online to meet the 31 January electronic deadline.
Filing online
If you haven’t converted already to using HMRCs online tax platform, we’d recommend you do so, for a number of reasons:
- More time to send in your return;
- Instant tax calculation before you hit the “submit” button;
- Work on your return over a period of time, collecting the information you need;
- Mistakes are easy to correct; and
- Make corrections to previous tax returns.
To set up a self-assessment account online, register on the HMRC website. For this you need your unique tax reference, a ten-digit number you can find on any letter from HMRC, and to answer a few basic questions about you and your business.
Would you like some help meeting the self-assessment tax deadline?
No one wants to be a Scrooge: we all have to pay our fair share of taxes if we want to enjoy the services we expect in a civilised society. But there’s no need to pay more than the government asks for. If the looming self-assessment tax deadline is causing stress, consider reaching out to Black and White Accounting for professional assistance; as an experienced local self-assessment accountant can help ensure a smooth and timely submission, allowing you to enjoy the festive season with peace of mind.
If you feel that you or your business is at the right stage for you to hand over the accounts, and the stress, to a professional, then, please contact Black and White Accounting or ring 0800 140 4644.
