Preparing your Tax Return for 2016

5 Tips To Fill In Your Self-Assessment Form

Having your 2015 tax return ready and in on time can save you thousands of pounds in fines and penalties. As 2016 is drawing ever closer, don’t be one of those who have a last minute rush to have your tax return in before the deadline of January 31st 2016.

If you have received a taxable income that hasn’t been covered by PAYE (pay as you earn) in the year to 5th April 2015, a tax return needs to be completed as soon as possible. The deadline for passing a paper tax return is October the 31st, which leaves you with one option if you were to wait till after this date. This is to complete an online self-assessment.

If you have received a non-PAYE income since April last year, you don’t need to fill in a tax return for this year. The advice below however, will help you to be prepared for 2017’s deadlines, although it seems a long way off, having your tax return ready and in on time is extremely important.

It is always better to be prepared. If you are late on your tax return you could be hit with fines as heavy as £100, with £10 a day added on top of this for a maximum of 90 days! Costing you £10 a day over three months will add up to a further £900. This means over a three month window you will be paying a fine of around £1,000. It doesn’t stop there either, after this you will pay an additional £300 or 5% of the total that is due. You will pay the higher price of this, so it will either be the £300, or 5% of the fine. After 12 months, there will be another fine of £300, or 5% on top of the previous charges and fines you have been dealt.

Even if you can’t afford to pay the bill, it is still important to file your tax return. By sending your tax return, even if it is unaffordable, the fines for late payment are much lower than a late filing fine.

Follow these 5 steps and you WILL be fine!

Get Your Paperwork Together

To have your tax return filled out correctly, you need the details of everything you have earned over the tax year, this goes from 6 April 2014 - 5 April 2015. This will include income from: employment, self-employment and property. Your tax return also needs to state any other forms of income and gains, for example, interest received through savings or investment returns. It is best to try and keep records neat, easily accessible and ordered, this way your tax return will be much easier to fill out. If you don’t have your records all in one place, or to easy access, then it is best to get this put together as soon as possible.

Note: You will need a record of all of deductible expenses, to ensure you won’t be paying unnecessary tax.

Understanding Tax Return Forms

It is very easy and extremely common to make mistakes on tax return forms, due to the self-assessment being complicated. It is best to start familiarising yourself with all of the questions prior to filling out the form, to ensure you understand everything completely. If you are filling out the tax return form for the first time, or are unsure on some questions, it could be best to seek help from an accountant. When you have a large tax bill, it is best to make sure everything is done correctly. Receiving help from an accountant may cost you £150, but could save you more than ten times that in the grand scheme of things.

Don’t Be Afraid To Claim Expenses

If you work from home you can claim on your tax to help reduce your bill. As an example, you can claim on your energy costs, but only on those that are where you are working at the appropriate times. This would mean, if you had a six room house and worked from one of the rooms, you would divide your energy bills by six. From this, you should work out the length of hours you have been working for, and claim on your energy bills that cover this time.

Note: You can also claim against your mortgage interest too in this same way.

Learn From Tax Return Mistakes

It is best to always learn from your mistakes and take this on board for next year. Not only will this reduce stress levels, last minute rushing around (and panicking for evidence and documents) can often lead to missing vital information out, or causing mistakes. Try to find your evidence for your income and expenses early, and don’t make the mistake to leave it until the last minute again.

This will allow you to file your tax return at any time, from the end of the tax year, right until the end of the following January. There is no reason to leave your tax return until last minute. Have your tax return ready and filled out in good time, and avoid the nasty consequences!

Tax Return Done… Don’t Forget To Pay The Bill!

Now your tax return has been filled in, the only thing to focus on is knowing how much you owe the tax man, and more importantly not forgetting to pay it! Your tax bill for 2015/2016 must be paid by 31st January 2017, whilst your tax bill for the previous year is due in just a few short months. If the bill is not paid by this date, you will be hit with fines for late payments, so please don’t make the mistake of not paying your bill in time, as it could set you back massively...

The best thing you can do here is to call LDF Accountants Ltd and ask us for professional advice regarding your self assessment tax return. We will do most of the work for you, ensuring a smooth, hassle-free process.

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