We are firmly within the tax season and, as the 31st of January tax return deadline looms, we thought it would be worth a look at five tax tips to make your life easier.
The first one is your Unique Taxpayer Reference (UTR) number. Your UTR number will have been sent to you when you first registered for Self-Assessment or set up your limited company. If you cannot find it, then the first place to go is HMRC’s Self-Assessment helpline on 0300 200 3600, where you can request a brand new one.
One of the main reasons people contact us whilst filling out a Self-Assessment is because they have lost heart and do not have all the paperwork required. The key is not to give up! To avoid paying any fines, you can submit an estimated tax return and update it later when the relevant paperwork arrives. You can normally make changes to your tax return for up to a year after the filing deadline.
Also, don’t get stressed about doing the sums wrong! When you look at the figures you might think they are slightly out. HMRC can issue penalties in cases of careless or deliberate mistakes, but they will not normally issue a penalty where reasonable care has been taken. Luckily, many of the calculations will be done for you when you do the online form, but it is always worthwhile making sure they get double-checked – speak with your Wealth Strategist or your accountant if you are not confident.
Take the opportunity to make it easier for yourself next year. If you are nearly done with your return, it is tempting to try and forget about it until the same time next year. However, now is the time to make changes so things are less stressful next time. For example, if you hold investments, think about putting them into an ISA to both make things simpler and to cut down on your tax bill.
Don’t forget to declare all your pension payments. You need to include any pension contributions that you made in the 2020/21 tax year, and to get these figures correct. Make sure you input the gross value, what you paid in plus the Basic Rate Tax relief at 20%. The good news is that, if you pay higher rates of tax, then this will make a big difference in reducing your tax bill.
The bottom line is that Self-Assessments are never going to be anyone’s favourite job – but they can be significantly less taxing than you first think. If you need any help in completing yours then please contact us and we will do our best to help.