What makes your perfect Christmas Day? Unwrapping gifts with loved ones, turkey and all the trimmings, the Coronation Street special…and completing your tax return?
According to figures from HMRC, this is exactly how 2,412 people in the UK spent December 25, 2018 – and a staggering 204 of them were ticking their tax boxes at 8am while the rest of the nation was discovering what Santa had left in their stockings.
Boxing Day didn’t fare much better. Most families were loafing on the sofa in a Quality Street-induced haze, but 8,465 individuals completed their tax return on December 26, taking the total number who used the festivities to catch up on financial admin to over 11,200.
The deadline for submitting your 2018/19 self-assessment is fast approaching, but the message from Hall Morrice is that a tax return is not just for Christmas. Our team can help you plan for this annual event throughout the year, and make sure that your return is submitted, and monies owed paid by January 31.
So, who needs to complete a self-assessment?
If you are employed, your employer will usually deduct tax automatically from your wages, but if you are self-employed, a company director or run your own business, you will usually have to report your taxable income in a return to HMRC. If you haven’t filled out a return previously, you should register for this in advance.
What details do HMRC need to know?
We understand that this is one of the trickiest questions to answer. Indeed, many people report that they take up to five hours to complete the return because they get bogged down by the amount of jargon they need to wade through. This is where your accountant comes into their own. They will work with you throughout the year to keep detailed records which ensure you declare the correct taxable income and are not paying tax on legitimate business expenses. But don’t worry if you haven’t approached an accountant before now – there is still time to get help.
How do I know how much I have to pay?
HMRC will use the information that you have submitted in your return to calculate how much tax is due. If you leave it to the last minute to submit your return, you should be aware that the sum owed must also be paid to HMRC by January 31.
What happens if I can’t get it done by January 31?
You’re going to be hit with a financial penalty! If you file it or pay it as much as one day late, you will receive a £100 fine. You’ll have to pay more if it’s later than three months, and you will also be charged interest on late payments. You can appeal against a penalty if you have a reasonable excuse…but it’s so much easier and a lot less work if you just get the return submitted on time.
This is the type of work that comes as second nature to us as accountants, but we understand that completing a self-assessment tax return – especially if you have never done it before – can be a daunting experience.
An accountant will not only ensure that you have all the correct records which demonstrate how much tax you should pay but take care of submitting the information for you.
That way you can relax during the festivities …and eat, drink and be merry.