That famous ‘death and taxes’ summation of life’s certainties, so eloquently quoted by Benjamin Franklin in 1789, could well be updated for the 21st century to include deadlines.
Case in point: the deadline for your tax return is looming!
Paper submissions should be completed by 31st October. (If this statement alone is bringing on palpitations, because you haven’t found the time or energy to complete yours, there is still time to rectify the situation – simply get in contact now.
However, if you haven’t yet made the transition to submitting your tax return online, now would be a good time.
Why? HMRC are doing all they can to simplify the process of online tax submissions and reduce workload (not to mention all those piles of paperwork), so you should find the process far easier than you may think.
Not only that, there are significant changes ahead that will see online submissions becoming mandatory in the coming years. You may have already heard about ‘Making Tax Digital’ (MTD), for example, a government initiative intended to herald the “end of the tax return” by 2020.
Under MTD, summaries of income and expenditure will need to be sent electronically to HMRC four times a year, instead of one annual tax bill. MTD is intended to simplify the taxation process and more accurately project tax figures, and HMRC are working closely with accounting software providers to ensure appropriate integration with their own software. Watch this space.
In the meantime, regardless of how you wish to submit your tax return, you have probably recognised by now that it does need to be submitted!
It may seem obvious, but if you have all the right paperwork to hand before you complete your tax return, you will find the process much easier.
Below is a handy, non-exhaustive list of the records you will need for various income categories (you do not need to send this paperwork to HMRC, simply the appropriate figures):
- Employment and pension income (excluding state pension)
- Forms P60 and P45 that are relevant to the tax year
- Payslips and bank statements
- Self-employment income
- A summary of any rental income and expenses
- Income from savings
- Dividend statements
- Capital gains information, e.g. contract notes for the sale and purchase of assets, such as shares or antiques
You will need to ensure that you can account for the figures you submit to HMRC. In the event of a tax enquiry, you could be asked to explain where large amounts of money have come from, or how you have been able to provide for your general lifestyle. This means that if, for example, you have taken out a loan or received a cash gift, you will need to retain the appropriate paperwork.
Once you have submitted your tax return, don’t throw all your paperwork away with a huge sigh of relief! You will need to retain your records for at least twelve months afterwards; longer if you have submitted a late return or are subject to an enquiry. If you are self-employed, records need to be kept for at least five years.
If you’re still struggling, take comfort in the fact that you have probably never met anybody who enjoys doing their tax return: the phrase in itself is often enough to inspire panic! However, you are now hopefully armed with enough information to help you complete yours with ease.
And of course, if you would rather be doing something else, you can always outsource the task to a friendly and professional accounting firm who have made taxation their business!
STB Accounts and Bookkeeping can take away your tax headaches in a flash – simply call us or click here to find out how.