Finance
There’s no need for Tax Returns Over Turkey – a guide to January’s Self Assessment deadline
~ 3,003 business owners submitted Self Assessment Tax Returns to HMRC on Christmas day last year – a record high number ~
~ Ed Molyneux co-founder and CEO of FreeAgent offers advice to self-employed on best practices for filing a tax return before the January deadline ~
Although the Self Assessment tax deadline isn’t until the 31st of January, there continues to be an increase of self-employed workers in the UK choosing tax returns over turkey by using the festive period as the ideal time to submit their tax forms online with HM Revenue & Customs (HMRC). In fact, last year a record high 22,035 taxpayers submitted Self Assessment Tax Returns on Christmas Eve, 3,003 submitted on Christmas day and a further 9,254 filed on Boxing Day.
While people may be missing out on festive fun during the Christmas period, filing early is encouraged by HMRC. If the deadline of 31st January is missed, HMRC will automatically issue later filers with a £100 penalty and will charge interest on any unpaid tax.
Ed Molyneux, CEO and co-founder of FreeAgent, who provide award-winning online accounting software to freelancers, small businesses and their accountants, said: “A lot has changed since the last January Self Assessment deadline. We’ve seen an unprecedented number of challenges that few would have envisaged 12 months ago, and it is small business owners and self-employed people who have been hit the hardest.
“It’s important that people running these types of businesses try to take some time out to enjoy a well deserved break over the festive period. However, they also need to ensure that they don’t miss the Self Assessment deadline and cause themselves unnecessary pain. Therefore, my advice to business owners is:
- Get prepared – Firstly, register with HMRC and give yourself a few weeks to complete the process. You won’t be able to submit your tax return without doing this.
- Gather your paperwork – Secondly, you’ll need to gather all your relevant information before you can file your tax return. Depending on your circumstances, this could include proof of self-employed income, a P60, P45 or a P11D. As a basic rule, you’ll need to show any money you’ve received or earned from pretty much anywhere – including wages from a job, income from a trust, and interest from your bank account (except an ISA). If you’re a limited company shareholder, you’ll also need to provide proof of any dividends received during the tax year. You don’t want to be gathering this paperwork at the last minute, so make sure this is all in order ahead of time.
- Use this tick list – Luckily, if you need reminding what you’ll need, we have put together a useful list of everything you’ll need to fill out and file your Self Assessment tax returns.
- Take advantage of helpful resources online and get professional advice if you need to – Make sure to consult HMRC’s website or get help from a professional accountant or tax advisor to make sure you understand all of the regulations in place specific to your business. If you’re stuck with the jargon, then you can use our guide on Self Assessment lingo.
- Make next year easy by keeping your accounts up to date – if you keep your accounts up to date all year, then this will help you to avoid having to rush to meet the deadline for filing your tax return. This way you can enjoy your festive break with nothing hanging over your head!
“We all deserve a rest this Christmas, so make sure you get yourself prepared and thank yourself on Christmas day when you are able to sit back and soak up the joy of a stress-free celebration with those who matter most to you.”
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