Sage : 7 tips to get your Self Assessment tax return right

Don't panic. If you haven't submitted your Self Assessment tax return to HMRC yet, there's still time to do so.

There's a few weeks left to file your tax return for the 2020/21 tax year, which ended on 5 April 2021.

Alas, the deadline to submit your tax return via the paper SA100 form has passed. That was 31 October 2021.

But you still have until midnight on 31 January 2022 to file your Self Assessment tax return online.

(Find out how and why you can submit your 2022/2021 Self Assessment tax return by midnight on 28 February 2022 without incurring a penalty.)

To help you get this done on time, and so you avoid a penalty, Jonathan Wingfield of Ensors Chartered Accountants shares seven pieces of advice for self-employed business owners.

Here's what the article covers:

1. Get into good habits early on

2. Carry out a monthly reconciliation

3. Complete your tax return as soon as you can

4. Don't be late

5. Claim all expenses to which you're entitled

6. Avoid mistakes and inaccuracies

7. Get an accountant to do it for you

Final thoughts: Get your tax right

Download your free Self Assessment guide and boss your tax returns

1. Get into good habits early on

As soon as you start your business, keep accurate, up-to-date records of your income and expenditure as you move through the year.

Using accounting software to automate your record keeping can make life much easier, especially when it's time to complete your Self Assessment tax return.

2. Carry out a monthly reconciliation

Compare your income and expenditure with business bank statements to ensure your records are correct. In other words, make sure your bank balance as per your records tallies with the actual bank statement.

This will ensure any human errors are easily and quickly identified and you can be sure at year-end all the figures you send to HMRC are correct and complete.

3. Complete your tax return as soon as you can

If you realise you are missing some information that is needed to complete your Self Assessment tax return, you'll be able to save the work you've done and come back to completing your return online once you've collected the information you need.

And completing your tax return in good time will also mean you'll know how much tax you owe early enough.

Read more about Self Assessment

• Allowable expenses to add to your Self Assessment tax return
• Self Assessment: A guide for small businesses on filing tax returns
• 7 tips to get your Self Assessment tax return right
• How to make Self Assessment less stressful for your practice
• 7 top tips for filing your Self Assessment tax return

4. Don't be late

Make sure you submit your Self Assessment tax return before the deadline.

Any late submissions are likely to result in an immediate £100 penalty and this increases after three months.

You're also liable for interest on outstanding sums, so it's better to pay your Self Assessment tax bill on time.

Download your free copy of Taking care of tax if you're self employed: Key points about Self Assessment and Making Tax Digital

5. Claim all expenses to which you're entitled

These will be 'offered' as you move through the form online but it's wise to know what expenses you can claim for when you're self-employed before you start filling in the form, especially if it's your first time.

6. Avoid mistakes and inaccuracies

Don't try to claim expenses to which you are not entitled, whether deliberately or not. The penalties for false claims can be severe, as can failure to declare income (which can lead to prosecution).

Using accurate records that are up to date usually ensures the accuracy of your self-assessment tax return and bill. Take your time when inputting figures and double-check them.

If you make a mistake on your return, you normally get 12 months from 31 January after the end of the tax year to correct it (called 'an amendment').

7. Get an accountant to do it for you

I would say that - wouldn't I? However, an experienced accountant will make sure things are done correctly, promptly and with far less hassle for you.

In addition, they'll ensure you claim for everything you're entitled to claim for, which will help to minimise your tax bill.

Final thoughts: Get your tax right

There's few things better than the feeling of satisfaction that comes from knowing you've taken care of your tax for another year.

Putting in the effort sooner rather than later means you can do more of what you love - growing your business and serving your customers or clients. And, as we explain above, it's actually not that difficult - especially if you get expert help.

In April 2024, income tax for sole traders becomes even easier because of Making Tax Digital (MTD) for Income Tax. For sole traders or landlords earning over £10,000 per year from their work or rental property, MTD promises to revolutionise how they handle their tax.

Take a look at our Sage Advice article to learn more, and get yourself ready.

Editor's note: This article was first published in January 2019 and has been updated for relevance.

Boss your tax returns with our Self Assessment guide

Is filing your Self Assessment tax return a struggle or is it the first time you're doing it? Check out our step-by-step guide, which covers what you need to know.

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