The deadline for Self Assessment tax returns is not until 31 January, but there are plenty of reasons to make an early start. In this article I’ll give an overview of some of them, alongside tips for making the tax return process a little easier.
1. Register now
Common reasons for needing to register include becoming self-employed or starting renting out a property. The easiest way to register is online via HMRC’s website.
2. Request bank interest certificates
Your bank can post you interest certificates showing a summary of interest paid and tax deducted in the tax year. This will save you locating and trawling through 12 months of statements and adding up figures. Don’t forget to get certificates for any accounts closed in the tax year (eg fixed term savings accounts).
3. Plan next year’s tax bill
Knowing in advance what you will need to pay in January makes it is a lot easier to set aside enough money. Crucially, you can avoid any nasty surprises.
4. Improve your cashflow
If you are already within Self-Assessment and make payments on account each July and January, it may be worth completing your tax return prior to 31 July, so that a claim to reduce payments on account can be made to potentially give a cashflow advantage.
5. Be prepared with earnings figures
Business-owners planning to take out a personal mortgage will often need a tax summary from HMRC showing last year’s earnings. If you are within Self-Assessment, you will need to file your tax return before this statement can be obtained.
6. Consider your business structure
If your main source of income is from being a sole trader or partnership, and you are a higher rate taxpayer, it may be worth considering company incorporation sooner rather than later. Completing your tax return early can help plan whether this is appropriate or not.
If you need help with Self Assessment, please get in touch.