5 Tips for Filing Self-Assessment Taxes - What to Know?
The 2019/20 tax year ended on 5 April 2020, and the deadline to submit it via paper was last 31 October 2020. However, it's still possible for people who haven't submitted their Self Assessment tax return to HMRC to file it online until midnight of 31 January 2021. To avoid a penalty, you have to meet the deadline. Here are things to remember about filing taxes if you're a self-employed individual.
Keep Your Records Updated And Accurate
When you start your business, strive to form good habits early on. Have organised records of your income and expenses. As you move through the year, you should update your files accordingly. Make things easy for you by hiring accountancy services and letting a professional handle things. You could also get accounting software, though that would have a learning curve.
Do A Monthly Reconciliation Of Your Finances
Check your business bank statements against your records of your income and expenditures. Doing so ensures that your files are consistent. You want to know if the bank balance tallies with your bank statement. If you are familiar with the figures on your statements, you can identify human errors on your records and catch them before sending them to HMRC.
Fill Out Your Tax Return As Soon As Possible
Completing your tax return on time has plenty of benefits. For one, you know exactly how much tax you owe as early as possible. If you are filing online, you can enter your information beforehand and fill in data as you receive it. If you do this, you give yourself a buffer period for corrections.
It bears repeating that you should submit your Self-Assessment tax return before the deadline. For online submissions, you have until midnight on 31 January 2021. However, do not wait until the last minute because HMRC imposes a £100 penalty on late submissions, increasing it after three months.
Claim Expenses That You Can
Know which expenses you can deduct from your self-assessment before you fill in the form. Research this if it's your first time to file this type of tax. If you're unsure where to begin, hiring accountancy services is an excellent first step. An accountant can help you identify expenses you can claim.
Try Not To Commit Mistakes On Your Forms
Knowing which expenses to claim is essential because making mistakes on your forms can be costly. False claims, whether deliberate or not, have penalties, and some could even lead to criminal prosecution.
Accurate record-keeping ensures that you have the right information to report on your tax return. Also, when it's time to work on your files, take your time. Double-check figures and ensure that you're putting in the right numbers. If you make a mistake, HMRC gives you a certain period to correct it.
Filing taxes can be a tedious affair, especially if you are a self-employed individual. As such, it's good to consider hiring an accountant for your business. Besides helping you keep accurate records and assisting you in the filing, an accountant can identify things you can claim as business expenses and help you plan your next financial year.
Let 1to1 Accountants handle your tax filing needs in England. We provide accountancy services for freelancers, tradespeople, and all types of businesses. Get in touch with us today or schedule a free consultation!