Sage: 7 tips for completing your self-assessment declaration

Running your own business and being your own boss is a fantastic way to go.

But one task that you may have to deal with is completing a self-assessment tax return.

Self-Assessment is a system that HMRC uses to collect the information needed to calculate the amount of income tax you owe. And if you’re running a small business instead of earning a traditional salary, you need to figure out how much you owe.

In this article, we share seven tips to help you complete your self-assessment tax return.

We’ve brought together advice from HMRC and Shaw Gibbs, one of the top 100 accounting and financial planning firms with offices in Oxford and London.

And there’s also bonus advice from one of our Sage business experts.

Here’s what we cover:

1. Put your house in order

2. Be clear about what expenses you can claim.

3. Don’t be afraid to ask for help

4. Register for the self-assessment

5. Have a clear plan

6. “Do the deed”

7. Get a head start

Bonus tip: don’t leave it at the last minute

Final thoughts on filing your tax return

1. Put your house in order

Completing a self-assessment tax return is much easier if you keep good records.

Use a separate business bank account, along with accounting software to track your income and expenses throughout the year rather than leaving it all to the last minute.

Keep good records (such as bank statements or receipts) to properly complete your tax return.

2. Be clear about what expenses you can claim.

The more legitimate the eligible expenses you can claim, with the accompanying evidence, the less tax you will pay because you can offset the costs with the profits.

It is worth seeking advice from an accountant or tax advisor on any major purchase such as cars and vans.

3. Don’t be afraid to ask for help

Accountants often pay themselves – highlighting tax savings may be worth more than the cost of their services.

Good accountants will spot potential errors, which will reduce the risk that you have to face an audit by the HMRC and the possible penalties for errors in your tax return.

According to Shaw Gibbs, if you’re considering getting help, it’s worth appointing an advisor early.

Most companies complete and submit their self-assessment reports during the same period (usually December and January). If you leave it late, you might have a hard time finding an accountant who can help you.

It’s also worth checking out free forms and help sheets, webinars, and other resources on the HMRC website.

4. Register for the self-assessment

The first time you complete a self-assessment tax return, you will need to register with HMRC as an independent, non-independent, or as a partner or partnership. The process varies depending on your status.

Make sure you allow HMRC up to 20 business days to process your request and give yourself plenty of time before the deadline to complete your return.

Once you have registered, you will receive a Unique Taxpayer Reference (UTR), which you will need when filing your return.

You can choose to file your tax return by post or online – the latter allows you to save drafts, view returns and print tax calculations.

If you are completing your tax return online, you will first need to register for online services. HMRC will send you an activation code. Wait up to a week for this to happen.

You will need to enter the UTR, activation code and your postal code in Government Gateway or GOV.UK Verify.

Once you have registered to use the system, you will need all of your tax records, dividend receipts, receipts, and other information to complete the online form.

You can save your progress at any time and come back to complete the form later.

5. Have a clear plan

Avoid filing a tax return under pressure.

The deadline for paper returns was October 31, 2021. Online tax returns must be completed by midnight January 31, 2022. And tax must be paid by midnight January 31, 2022 for the previous fiscal year ending on April 5.

Make sure you allow sufficient time to complete and submit your self-assessment tax return to avoid late filing penalties.

You will receive a penalty of £ 100 if your tax return is up to three months late. And you’ll have to pay more if it’s later than that, or if you pay your tax bill late. HMRC will also charge interest on late payments.

Nobody needs this.

Learn more about the self-assessment

6. “Do the deed”

Most of the questions on the self-assessment tax return form are similar. If this is your first time submitting one, it may be worth reading everything before you start filling it out.

This way, you can see what information is in each section and complete the task faster.

When you work online, tax calculators will determine how much you owe. The amount will depend on your tax bracket. For some people, tax will be automatically deducted from wages and pensions.

If you have additional income, such as a second property that you are renting out, you will need to complete an additional section.

There is also a different rate for capital gains tax if you have to pay it – if you sell stocks or a second home, for example.

7. Get a head start

According to Shaw Gibbs, if you need to submit a self-assessment tax return, it’s worth submitting it as soon as possible after April 6 of any fiscal year so you can plan your finances for the year. based on any tax payable or refund.

Robert Shadbolt, Personal Tax Advisor at Shaw Gibbs, says: “There are many tax breaks that go unclaimed each year.

“A tax advisor knows what it is and can help you be more tax efficient – for example, by suggesting that you use the trading allowance.

“Accountants can advise on the best course of action for major decisions or purchases, such as donating assets to family members, selling secondary properties, and making large contributions to the pension plan.

“Accountants can also easily spot errors and misclaimed expenses – items that are not entirely and exclusively intended for running a business.”

Bonus tip: don’t leave it at the last minute

Steve Johnson, Sage Business expert and owner of Graphite Web Solutions, says: “While there is a deadline to complete your tax return, you don’t have to leave it until January 31st as it increases. pressure and can increase stress.

“Try to finish your accounts towards the end of your year, as this will give you time to complete your income tax return. Then you can relax knowing that it’s all over.

“Plus, you can focus on your New Year’s promotions rather than worrying about filing your income tax return.

“Personally, from day one of running my own business, I decided to hire an accountant to submit my return for me. July.”

Final thoughts on filing your tax return

By following these tips, we hope that it will be easier for you to complete your self-assessment tax return, so that you can focus on what you do best – running your business.

Editor’s Note: This article was first published in November 2019 and has been updated for relevance.

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