summary: Deadlines Keeping records Financial records Investments, savings and pension records Allowable expenses How to pay Penalties and appeals

Transcription

1 d&t Self-assessment

2 summary: Deadlines Keeping records Financial records Investments, savings and pension records Allowable expenses How to pay Penalties and appeals Do you know the deadlines for your self assessments? Do you know how to complete a self assessment form? This guide will answer the above questions in detail and will provide you with everything you need to know about self assessments.

3 Self assessment is used by Her Majesty's Revenue & Customs to collect tax from individuals who are running their own business, or if they are receiving income that is not being taxed through PAYE. Individuals that have to submit self assessment tax return, fall into a number of diverse circumstances including: Being self-employed Having savings or investment income Receiving 2,500 or more in untaxed income (e.g. renting out property) Being liable for capital gains tax Being a company director

4 Deadlines When preparing to submit your self-assessment tax return and pay tax, there are 4 deadlines to remember. Task Registration Paper returns Online returns Tax payment Deadline 5 October Midnight 31 October Midnight 31 January Midnight 31 January

5 Keep records When completing a self assessment tax return, keeping accurate and up to date records is highly important. Her Majesty's Revenue & Customs can ask to see relevant documentation if they are checking your tax return, and inaccurate/incomplete records could be subject to a penalty. Keeping all your details close to hand will make completing your tax return much more straightforward. If some/all of your financial records have been lost or destroyed, obtain duplicates from relevant third parties. If you can t obtain the duplicates for all your figures, use the any other information box on the tax return which indicates that you have provided estimated or provisional figures. Provisional figures mean that you will be able to obtain the paperwork to verify them. Estimated figures mean that you will not be able to provide supporting documentation. If you re self-employed, you must keep your records for 5 years after the 31 January deadline of every tax year. If you re not self-employed, keep your records for 22 months after the deadline and 15 months if you file your tax return after the deadline.

6 Financial records If you re registered as self-employed, you should keep records of all business expenses, all sales and/or income, PAYE records (if applicable), VAT records (if registered) and records about your personal income. If you re employed or a director of a limited company, you should keep: Your P45 Your P60 Your P11D (click here for more information on P11Ds) Information about any redundancy payments You should also keep records, if they are relevant, of any tips, additional benefits such as meal vouchers, income from employee share schemes and any lump sum or incentive payments not included on a P60 or P45.

7 Investments, savings and pension records It s important to also retain bank statements, statements of interest, dividend vouchers, unit trust tax vouchers, information on income from a trust and information on any other income. If you have got a pension, you should keep form P60 which your pension provider will usually send to you, and any other pension details (including state pension) and the tax deducted.

8 Allowable expenses for self employed Allowable expenses are payments which have been made that can be deducted against tax. A significant number of business expenses can be set against tax. When you are completing a self assessment return, some of the items you can claim against include: Vehicle running costs Mileage Business premises running costs including utilities, phone and internet Salaries and wages Capital assets purchased solely for the use of the business such as tools, IT equipment and software Training courses solely for the benefit of your business Rules on allowable expenses are stringent. If you are unsure about whether you can claim for a particular expense, get in contact with us today and we can provide more detail.

9 How to pay When it comes to paying your tax bill, it can be done over the phone, online, or by sending a cheque in the post. You must pay using the payments on account system if you are self-employed. Payments on account are advance payments towards your tax bill. Every payment is half your previous year s tax bill. Payments have to be made by midnight on the 31 January and 31 July. If there is more tax to pay after making payments on account, a balancing payment must be made by midnight on 31 January the following year.

10 Penalties and appeals If you submit your tax return late, it means that you re subject to a penalty charge. A penalty of 100 is applicable if the return is up to 3 months late, with penalties increasing if the return is even later, or if your tax payment is late. However, you can appeal against a penalty which has been levied by Her Majesty's Revenue & Customs if you have a reasonable excuse for late filing/payment, keeping inaccurate records or not paying enough tax. Reasonable excuses can include the following: Death of a partner or close relative just prior to the deadline Serious illness An emergency hospital stay An IT failure when preparing or just before preparing the tax return Unexpected delays in the post Fire, flood or theft which prevented you from completing a return

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