The good news is that, as the deadline for submitting your return is still some months away, you should have plenty of time to get all of your financial information together and calculate how much tax you owe to HMRC.
However, the bad news is that the self assessment process can be quite confusing when you’re going through it for the first time and it’s very easy to make mistakes.
Here are some top tips to help make completing and filing your self assessment tax return by January 31 2016 deadline as painless as possible.
(1) Remember to register with HMRC
Before you can start your Self Assessment, you have to make sure that HMRC are actually expecting a tax return from you. That means you must make sure that you have registered your business with HMRC before you do anything else.
As the deadline for filing a paper tax return is October 31, it’s highly likely that youll be filing your return online instead. That means that you have until January 31, 2016 to submit your return online to HMRC.
That may seem like you have plenty of time left to get your business registered, but remember that HMRC has to send you an activation code by post. If you dont have this code, you can’t file your return so make sure you register early so you dont get caught up in the postal rush over the Christmas period.
(2) Decide what your year end date will be
All businesses must prepare their accounts to a particular date every year, which is called your businesss year end date or accounting year end date.
The simplest year end date to have in the UK is one that matches the tax year, which runs to April 5 each year. By concession, HMRC treats accounts that end on March 31 as matching the tax year.
You can choose whatever year end date you like, but a year end date that doesnt match the tax year can result in you paying tax twice on the same profits in the early years of your business (though in later years it means you may pay tax later than otherwise).
Also, in your first year of business, you would have to report on your tax return your profit figure for when you started your business to April 5, 2015 even if April 5, 2015 was not your year end.
If you want to keep things simple, it’s a good idea to stick to the tax year end it’s much easier!
Continue reading on page two to discover the bits that people most often forget to include in their accounts, plus other sources of income. Read on!