How to negate the stresses of tax deadline day
- 31 Jan 2018
Today marks an incredibly busy day for the 4.8 million self-employed people in the UK. That’s because the deadline to file your tax return and pay your bill is upon us and, of course, it brings with it additional stress for the self-employed workforce.
However, the pain of filing your tax return can be significantly reduced by if you have decided to go it alone rather than using an accountant.
- Be organised. Safely store away your p60, log your expenses, save and categorise your receipts, and keep an up-to-date log of your income. Apps like Intuit Quickbooks can help with this, and it’s well worth utilising them now. Because, in a few years, as part of the Government’s Making Tax Digital (MTD) programme, many businesses will have to use an app anyway.
- Don’t leave it until the last minute. Even if you’re very organised, there’s often something that requires searching for or thinking about – and this can be time consuming. For example, changes to Child Tax Credit may have caused headaches this year, while gift aid for charitable donations are worth searching for as they could help reduce your bill. Give yourself enough time to gather these additional extras, and start completing your return at least a few weeks before deadline day.
- Make sure you actually submit your return. Some people stop at the point a calculation has been generated, so make sure you continue through the process until you receive confirmation everything is complete. And finally, don’t forget to make the payment – the deadline is the same for submitting the return: 31st Jan.
Filing your tax return up to three months late will incur a £100 fine. Filing it over three months late will cost the larger sum of either £300 or 5 per cent of the tax due. Failing to file your tax return will result in high fines and additional stress, so it’s important its completed today.
Once MTD is rolled out completely, the yearly tax return will no longer be used. However, those that must file returns will find themselves inputting information quarterly rather than annually. Because of this, it is important to get into good habits now, such as keeping good records, so that the transition to quarterly reporting is as seamless as possible.
There are different ways to pay your tax bill, however, this year credit card payments are no longer accepted. IPSE opposes this because self-employed people should be able to pay their tax liabilities in a way that is easiest for them. Many self-employed people use credit cards to pay their tax bill as it allows them to better manage their cash flow. Removing this facility at such short notice is dangerous for millions of self-employed people so, hopefully, HMRC will reconsider this decision if causes problems during this tax season.
If you experience any issues with the tax return process, make sure you get in contact with HMRC as soon as possible. You can either call them or use their live chat feature, and it is important that you let them know if you are experiencing online difficulties.
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