|
1. Check that you are paying the right tax
If you file your tax return in time, HMRC will calculate your tax for you. However, there is nothing to stop you calculating it yourself. Can you always rely completely on HMRC getting it right? Also, it is worth being aware of roughly how much might owe so you don't get a nasty surprise in the new year.
2. Check you have the right forms and complete all the relevant pages
If you complete a paper return it will tell you if you need to fill in any supplementary pages regarding property, employment and capital gains. You can download any missing pages and help notes from the HMRC website.
Do not return any 'Additional Information' pages if you have nothing to enter on them.
3. Put money aside to pay your tax bill and don't incur unnecessary interest
The sooner you prepare your tax return, the sooner you can plan for its payment. As a general rule, you should put aside 20-25% of your profits to ensure you can cover your tax bill. Interest will start to mount immediately on unpaid tax. In addition, there is a 5% surcharge on all tax still owed 28 days after the deadline. This equates to an annual interest rate of 65%.
4. Check what tax relief you are entitled to
Do not assume that all expenses can be claimed for tax purposes. Tax relief is due only for expenses which are incurred wholly and exclusively for the purposes of the business, although in practice HMRC does allow proportionate claims to be made for assets like cars, which are used partly for business and partly for private purposes.
5. Keep your paperwork in order
For the relevant tax year (6 April to the following 5 April) you'll need records relating to
-
employment (payslips, P45, P60, P11D, etc.)
-
pension contributions you make or any pension you receive
-
income you might get from letting a property or land
-
any capital gains or losses you've made during the tax year
-
UK savings and investments
-
UK pensions, annuities and benefits
-
life insurance gains and AVC refunds
-
any other taxable income
-
all expenses relating to your business.
6. Avoid making common mistakes
Remember to sign and date your tax return, as an unsigned return cannot be accepted. Check that all the required pages are completed and any supplementary information included. Do not add notes promising information to follow, everything required should be included in the return.
7. Keep proof of your tax return
Take photocopies of your tax return to prove that you have filled it in and, if sending by post, use recorded delivery to ensure that you can prove filing.
8. Register with HMRC website to submit your tax return online
If you cannot make this deadline then do not fear, online returns have a later deadline on 31 January 2009. Filing online can help to avoid processing errors as the software will automatically calculate any tax payable. To submit your form online, you will need a User ID and password. These take a week to come through so, if you have not registered, make sure you do so as soon as possible.
9. Don't worry if you don't have exact figures
You are allowed to use estimates, or provisional figures that can be used until you confirm the actual amount (plus a date when you will supply this). You can use the 'Additional Information' section of the form to say how you arrived at these figures and why you cannot use actual figures. If you make adjustments later and you have underpaid tax you may have to pay interest and penalties, so it is worth being honest if you are not sure.
10. Meet the deadline
Returns filed after the deadlines (31 October 2008 for paper returns, 31 January 2009 for online returns) will be charged an automatic £100 penalty. Late Partnership returns attract a £100 penalty for each partner and Late Trust and Estate returns result in a £100 charge to the trust or estate.
If your business is not already registered with HMRC, inform them by completing form CWF1 available from their website. All new businesses have three months to register. Failure to do so can result in a £100 fine. More information
For more information and advice on completing your tax returns, visit the HMRC website or call their Self-Assessment Helpline on 0845 900 0444, open 8am to 8pm.
|
