This article was first published on 27 January 2016 and was last updated on 7 January 2019.
If you’re one of the millions of small business owners who has to file a Self Assessment tax return by 31st January and you haven’t made a start on it yet, you may be feeling anxious about meeting the filing deadline. Time may be tight, but you have until midnight at the end of Thursday 31st January, so roll your sleeves up, take a deep breath and make a start. Here are some top tips to help you on your way:
Double-check which expenses you can claim
You might be working to a tight deadline, but try to resist the temptation to dive straight into your Self Assessment in a blind panic. Before you start categorising your transactions, it’s worth getting up to speed with the rules surrounding business expenses and what you can (and can’t) claim - especially with regard to travel, accommodation, food and drink, entertaining, clothing and the business use of your home. You can do this by checking your proposed expenses against the info on HMRC’s website or our A-Z of business expenses checklist.
Gather your paperwork
You probably know that it’s a good idea to pull your paperwork for the 2016/17 tax year together before you begin completing your Self Assessment tax return. Not sure where to start? Here are the documents and information you should dig out as a priority:
- your P60
- interest from your bank account
- your business’s income and expenses (if you are a sole trader or in a partnership)
- the value of any dividends you’ve received on shares that you own
Remember that you’re looking for documents and information relating to the 2016/17 year, which ran from 6th April 2016-5th April 2017.
Take it one step at a time
The filing deadline might be looming, but try not to rush your tax return as you may be more likely to make a mistake. Tackle one section at a time and read all the instructions carefully. If you haven’t done so already, download our step-by-step checklist, which talks you through each stage of the process and provides lots of additional hints and tips to help you complete each section of the Self Assessment form.
Make sure you leave plenty of time to thoroughly double-check everything before you submit your completed tax return to HMRC. If you don’t feel 100% confident, it may be a good idea to speak to a qualified accountant who will be able to check it for errors.
Submit your tax return in time - and don’t forget to pay your tax bill!
Completing your Self Assessment tax return before the deadline is a great feeling, but don’t celebrate too early! Remember that you still have to file the form before midnight on the night of 31st January 2018, otherwise HMRC will issue an automatic fine of £100 - even if you’re just a day late. Remember that you also have to pay your tax bill by midnight on 31st January.
If you find yourself struggling to complete your tax return on time, don’t do a poor, rushed job just to get it submitted. If you miss the deadline, the worst that can happen in the first instance is that HMRC will fine you £100 for failing to file on time and you’ll also be charged interest if you pay your tax bill late. You won’t automatically get a visit from a tax inspector or face immediate prosecution by the authorities and you can still submit your tax return after the deadline has passed.
However, be careful not to get lulled into a false sense of security. HMRC starts increasing the penalties for late filing if you leave it too long, and there are also additional charges and interest to pay when it comes to paying your tax bill late. Dawdle too long and those penalties will quickly start to add up!
Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.