New to self-assessment? Why you should start your tax return this week
You may know the deadline to file your 2016/17 tax return and pay any tax owed is 31 January 2018.
But many people new to self-assessment could fall foul of the deadline and be issued with an automatic £100 fine by not allowing enough time for the registration process.
If you’ve never registered for self-assessment, you can’t submit your tax return online. The deadline for submitting paper returns has already passed (31 October 2017).
It’s not simply about sifting through old paperwork and working out your expenses and profit; you need to register for self-assessment – whether you’re self-employed or not – to get your registration pack with your Unique Taxpayer Reference (UTR) and activation code. It should take around three minutes to register.
Once you have your registration pack, UTR and activation code for the government gateway ID, you need these to register separately for the self-assessment online service.
You will see a 5 October 2017 deadline to register for self-assessment – HM Revenue & Customs confirms you can still register now.
This whole process can take up to 10 working days (21 if you’re abroad) so by completing this part this week, you’ll have the rest of the time to get on top of your accounts.
HMRC reports that around 50,000 tax returns were filed over the festive period, including 2,590 on Christmas Day and over 17,000 on New Year’s Day. It added that millions of returns will be submitted online over the next 16 days.
Around 800,000 people missed the deadline last year, resulting in an automatic £100 penalty.
Sarah Ghaffari, ICAEW technical tax manager, said: “It’s not just about the time it takes to submit your self-assessment tax return. You need to factor in enough time to track down and prepare the relevant paper work such as P60s, pension statements, possibly P11Ds and bank statements.
“If it’s your first year of submitting a self-assessment tax return you can sign up to file your return online. HMRC will send you an activation code in the post, which can take up to 10 days to arrive.”
Top tips to make your tax return as smooth as possible
ICAEW gives the following tips:
- Doing your return with plenty of time to spare, instead of rushing to the finish line, means you can take the time to check it over properly
- Make sure you have details about your employment income, find your P60 your P11D, which outlines details of expenses and benefits
- You will also need information on any dividend receipts as well as interest statements from banks and building societies
- Double check you have details of pension contributions made
- And don’t forget you can claim tax relief on charitable giving. Do you have records of all your gift aid payments – did you sponsor your friends to run for charity?