Every citizen’s responsibility is to pay taxes on time, not to mention file tax returns the right way. Non-payment or missing a deadline will result in late fees and charged interest. Moreover, failure to optimise allowances and reliefs can lead you to pay too much tax. With such an important bill heavily relying on the accuracy of the information, it’s understandable why filing tax returns is a stressful activity for many people.
That said, tax returns should not have to be a headache-inducing activity. To help alleviate panic and prevent you from incurring a fine from HMRC, we’ve listed down some information that will help you get on top of your responsibilities.
Know deadlines
Tax returns have multiple deadlines. Typically, you have six months from the end of the tax year to register for the first time and until the end of the same month (October) to submit your paper return. From the last day of October, you have until January of the following year to fill out your return online and pay your bill. In addition, advance payments can be made as early as July. If, for some reason, you have failed to pay your taxes on time and are unsure exactly how much you owe, Central London accountants such as those from GSM Accountants can provide you with expert help.
It’s essential to keep an eye on these deadlines, as missing the payment deadline can result in a £100 penalty. If you are pressed for time on deadline day, choose to secure online, use phone bank transfer, or in-person bank payment. These methods guarantee quick processing as opposed to cheque payment.
Prepare all the necessary paperwork
You will need to submit a lot of information in your tax return. Before filling out the necessary paperwork, it is best to research the information you need, as this activity can take some time to complete. Ensure that you obtain accurate information about your income for the tax year, expenses, and contributions made to charity, pensions, and non-profits, as these items may grant you eligibility for tax relief. Make sure to keep your NI number, Unique Taxpayer Reference (UTR), and the P60 at hand.
It’s always helpful to keep receipts
Any accountant will tell you the importance of archiving receipts for things you buy that relate to your income. You may utilise your expenses to reduce your tax bill. So, keeping the receipts makes it easy to calculate the exact amount of tax you owe. Bear in mind that there are many expenses you can claim, including work-related equipment, travel, professional services, stock, and many more.
If you are a self-employed individual with an annual turnover of £85,000, it is crucial to break down your expenses into different categories. Your receipts will play an essential role in reducing your tax bill when appropriately organised. Additionally, HMRC may require you to present physical evidence for these expenses.
Conclusion
If you are feeling overwhelmed doing all the preparations by yourself, it is best to seek the assistance of a professional accountant to ensure the accurate and proper filing of your tax bill. An accountant will ensure that your tax bill is paid on time and help prevent penalties altogether.
