No-one likes to complete and send in their personal tax returns to HMRC (as generally this will mean you need to pay them money) but it’s something that for a lot of us is a legal requirement. Not doing this on time or accurately could have some serious consequences. This can include some hefty fines and interest charges from our friends at HMRC. Today we will try to give you some guidance on how to best to get this right:
- Accountant – We strongly advise that you get help from an accountant. Clearly people can complete this for themselves however remember that the information provided needs to be accurate with every penny accounted for. There are lots of accountants central London that could support you with this activity and ensure they keep you on the straight and narrow.
- Deadline – Don’t miss the deadline! Sounds very simple but if you do, HMRC will start to apply interest to the amount due (when you do declare it) and can apply some pretty hefty fines to you. In order to ensure you meet the deadline we strongly recommend that you submit your return via the internet and HMRC site. When you do, you will receive a receipt of delivery from them (so there are no excuses that they haven’t received it and it was “lost in the post”).
- Pay by visa debit – In 2018 HMRC made a very drastic change that took a lot of people by surprise. They have mandated that your tax return money due cannot be paid for by use of a credit card. The reasoning they have communicated is around the fees they had to pay for this. A lot of people have been caught out by this and had to find other ways to make their annual payment to HMRC. Make sure you have the correct available funds beforehand so you don’t get caught out.
- Expenses – Make sure you log and claim every single business expense. This could be mobile phone calls, mileage claims, hotels, travel, entertaining, gifts etc. If it’s been used solely for the business the likelihood is that it can be claimed back. There is a full list on the HMRC website that gives you a full breakdown of what can be claimed.
- Communicate with HMRC – If you are having any difficulty in either paying the money due within the correct time or even getting the return sent to them then make sure you communicate that to them as soon as possible. For late payments, they may support monthly instalments (but include interest) and for late returns they may allow an extension (depending on the reasoning). Our advice is to contact them as soon as you know there is an issue for whatever the reason and be honest and transparent with them.
Hopefully this will give you a good idea as to how you can prepare for your personal tax return.