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Twelve top tips for filing your self-assessment tax return

15 January 2019

Taxpayers are responsible for registering for self-assessment, and filing a tax return. The deadline for filing a paper tax return for 2017/18 passed on 31 October 2018, so returns now need to be filed electronically by 31 January 2019 if you want to avoid a penalty. If you are not already registered for self-assessment it can take up to 10 days for your user ID and password to arrive in the post. Below are twelve tips from Deloitte, to ensure your tax return is completed and filed correctly.

  1. Once registered, check whether you are able to use HMRC’s free software to complete your tax return as there are some complicated situations (for example those receiving trust income or living abroad) where commercial software may be needed
  2. Make sure you have all of the relevant documentation: Pensioners should find details of their income on their digital tax account, but may want to check these from their P60s. Similarly employees will need to check P11Ds, giving details of any benefits in kind. You’ll also need details of any investment income outside an ISA, as these are not yet reflected on your digital tax account. Self-employed and landlords will need records of their revenue and outgoings
  3. Gather details of any professional subscriptions that you paid in the year that were not reimbursed by your employer. If the organisation is on HMRC’s approved list, your subscription should be deductible from your employment income
  4. If you have made personal pension contributions in the year, details will need to be provided on the return. Higher and additional rate taxpayers will receive additional tax relief through Self-Assessment. Remember that relief is restricted for those with income over £150,000
  5. If you receive bank interest during the year, tax is no longer deducted from this income at source, so you may have further tax to pay. Although there is a personal savings allowance of £1,000 for basic rate taxpayers, (£500 for higher rate and nil for additional rate taxpayers) the full amount of income must be included on the return as the relief is given when the tax is calculated. Similar rules apply for dividends, where the dividend allowance is £5,000. Those with low earned income and pension receipts which are combined with savings income may also be entitled to the £0-5,000 exempt band
  6. Do you have trading or property receipts but low expenses? New £1,000 trading and property allowances are available in 2017/18 in lieu of expense deductions. Trading and/or property receipts (excluding lodgers) of up to £1,000 each can potentially be received tax-free. If you have a lodger in your home, you can claim rent-a-room relief, the relief is now £7,500
  7. Remember to check your charitable donations under the gift aid scheme. Like personal pension contributions, Gift Aid donations may attract additional relief if you are liable to higher or additional rate tax
  8. Calculating rental profits: individuals are generally allowed to use the cash basis rather than accruals basis in calculating rental profits from 2017/18 onwards (i.e. recognising receipts and expenses based on payment dates, rather than the periods that they relate to). Where the switch is made, care is needed to ensure that no receipts or payments are double-counted or missed from your tax returns altogether
  9. Have you got married or separated during the year? Income from jointly-owned assets, such as rental profits, can sometimes be treated differently depending on whether the owners are married
  10. If you or your partner claim child benefit and your income is over £50,000 you may need to include a claw-back in your tax return
  11. If you have outstanding student loans and you are self-employed, you may be required to make repayments via your tax return
  12. Check, and double check, all of your details and ensure that you have accounted for everything. HMRC receive a lot of information directly from third parties, so if anything has been omitted, an enquiry may well be opened. Penalties for inaccuracies in tax returns are much harsher if HMRC spot them first and they will charge penalties if the original return is considered to have been filed ‘carelessly’. You can use provisional figures in your tax return if the final figure is not available, but it is important to provide the final figure as soon as possible

Patricia Mock, Tax Director at Deloitte, commented:
“Over 11 million people need to file self-assessment tax returns each year. Any return filed after the 31 January 2019 deadline - without a reasonable excuse - will mean a penalty of £100, even if there is no tax to pay. Online self-assessment records are now accessed through the digital tax account, and taxpayers should find that their pension and employment details for the tax year are already pre-populated on the online return system.

“Although the intention is that information will be added automatically, at the moment taxpayers still need to find information from other sources for other sources of income and deductions. When logging on, taxpayers should be prepared for HMRC’s two-stage verification process where an access code is sent to a mobile phone, alongside some additional identity verification questions.”

End

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