Easy tips on a tax return

So, it is that time of the year when you have to file your tax returns and like always, you have got a few weeks left before you start paying the hefty fines. If you are one of those souls earning out of the employer’s PAYE system, 31st January is the last day for filing the returns. If you are not able to meet the deadline, a flat £100 will be charged as penalty.

The more you delay, the more you pay because for every added day you have to pay extra £10 each day till 90 days, plus the interest on that amount.

The following step-by-step process will help you file the self-assessment form. It has the details about self-assessment and if you have to file a return.

1. Open an online account
The last date for filing the paper tax return is 31st October and if you have missed that date, you will have to file the return online. For that, you need to open an account on the HMRC website.

If you have already registered on the website, then it will be easy for you. But, if you are not, then you need to act fast. The activation code takes seven working days to be generated and sent in the post and without that, you will not be able to file your tax returns.

2. Keep all your paperwork handy
Searching for the correct paperwork at the last minute can bring in added trouble. So, keep everything handy when you fill out the form. Here are the papers that you will need: a P60 form. This should be from your current employer showing your detailed income and the tax that you have paid on that income; a P45 form. If you have quit your job in the current taxable year; a P9D or P11D form with details of the expenses and benefits; additionally, you need to present the details of building society accounts or bank interest, dividends received from investments and any other income that you have received in the taxable year.

3. Never ever call HMRC
It is never a good idea to call HMRC. Public Accounts Committee came up with a report that HMRC attends to just 50% of phone calls in 2015. Also, a third of those people whose calls were received, they had a waiting time of over five minutes.

It would be better to ease out that stress and get your queries answered online. If anything fails, you can visit the HMRC’s website for answers. You have videos to walk you through the registration process and also work your expenses.

4. Hire an accountant
If you are in panic mode at the last moment and have already gone through websites and articles for filing returns, then it is time to outsource the work to an accountant. They are experts in this sort of thing and have the experience to get the right paperwork.

You can sit back and relax because the accountant will make sure that no paperwork or any documentation has been missed, including a tax rebate

5. Learn from previous mistakes
Getting the paperwork ready at the last minute is a rigorous job. If you have already done this earlier, then you need to be more careful this time. Take time and make a list of all the savings accounts you have or the final tax that you may have to pay.

Ideally, you should make a spreadsheet of all your income and expenses details. Update this sheet every week or month. Also, make separate files for bills, important forms, and bank statements so that you get these documents easily when needed. Lastly, open a savings account and deposit a part of your income every month as money for your taxes.

This account can turn out to be a game changer because you might find some extra cash as the leftover after paying the taxes. Go out and have a sumptuous meal with your family or friends or even go out on a holiday with that money.

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