Top Tips if you haven’t yet filed your self assessment tax return for the year to 5 April 2022

I was asked last week for my top tips for anyone who has not yet managed to complete their own self-assessment tax return for the 2021-22 tax year…

If this applies to you, then read on and I do hope it’s of some help ????

We still have 11 working days, or almost 15 actual days between now and the 31 January deadline to submit your SATR and pay any liabilities to HMRC. So, first and foremost, don’t Panic!! You still have time, and it will help you to have some structure and be organised about this…

Here’s what we suggest:

1. Make sure you have everything to hand before you start. It’s easy to save as you go, but will take you longer, and once you’ve blocked the time I believe you’re better to just get it completely finished. For me these are: 

   • Have your personal Tax Account Open – if you don’t have one and need a link to set this up, let me know in the comments
   • Know your UTR
   • Have all your accounts details, so that means business income and expenditure, and the same from any other income streams – property or dividends for example
   • Any other business related expenses that you may not have included automatically in your accounts, such as use of home allowance / business mileage expenses / mobile phone etc
   • Any interest income you have received from your savings accounts
   • If you are a higher rate tax payer, detail of any gift aid charitable donations or memberships
   • Here’s a link to a video a did some years back on this very subject. While some tax rates may have changed, the general principles haven’t, so hopefully it will be useful:

1. Understand what qualifies as a business expense?

   • I’ve touch on this to a certain degree in the above video, or you can check out my YouTube Channel for more videos on the details of tax deductible expenses: https://www.youtube.com/c/INAccountancy
   • Anything that is used in the running of your business.  So, goods that you buy in order to sell on, or adapt/personalise and sell on; website costs; business travel; IT equipment etc. It gets more challenging for sole traders in particular when we think about personal branding, so photography to be used for your business, yes no problem, but clothing so you look good in that photoshoot – not allowable. 
   • The litmus test is that it should be ‘wholly and exclusively’ for business use.  Again, I’ve got an article on this subject, which you can find here: https://www.in-accountancy.co.uk/resources/news/personal-brands-and-tax-what-expenses-you-can-and-cannot-claim/

2. What if I can’t find specific evidence of business expenses that I know I made during the year? 

   • Again, don’t worry if this is the case:  it’s your self assessment so if you know it to be true and allowable, then claim for it. Just be prepared to provide appropriate evidence if challenged

3. Know the correct dates you are preparing your return for!

   • This January deadline relates to the fiscal year which started on 6 April 2021, and finished on 5 April 2022.
   • The return must be submitted online to HMRC before midnight on 31 January 2023, and any tax due must also be received by them by that date to avoid interest charges. 

4. Know how you will pay any tax liability: 

   • In reality it takes 3 working days for a BACs payment to clear, or if you are setting up for HMRC to take payment by DD for the first time, then you need 5 working days.
   • You will need to quote your UTR, usually with a K at the end as your payment reference, so that the payment gets credited against your liability

5. What are the penalties if I miss the filing deadline?  

   • If you happen to miss the 31 January filing deadline, and fail to pay any tax liability due over to HMRC before that date, then you will face the following charges:
     • Any return filed after midnight on 31 January but before 30 April: Flat £100 penalty
     • More than three months, but less than six months late: Penalties of an additional £10 per day for a maximum of 90 days (£900)
     • More than six, but less than 12 months: A further penalty of the greater of either 5% of tax due, or £300
     • More than 12 months late: A further penalty as above, AND you may also have to pay up to 100% of the tax you owe on top of all the penalties!!!

6. Will interest be charged if I am late?

   • If you do owe any tax, you will also pay interest on any late payment from the first day which this is late, at a rate currently set at 6%, and calculated daily (so you will pay interest on the penalties also!)

7. What if I don’t have a UTR? 

   • If you haven’t yet received your UTR from HMRC, don’t worry – The deadline to file is the later of the normal deadline or three months from when the UTR is issued
   • Any tax liability is still due to be paid over to HMRC by 31 January though, so you may get late payment penalties/interest.
   • There is also always a risk that you could get a late notification penalty

8. What if I can’t pay? 

   • You can set up a time to pay arrangement with HMRC. This is relatively straightforward, and providing your liability is less than £30,000, you can do this online – if you need a link, let me know in the comments

9. What else do I need to think about??

   • Payments on Account!!!! The biggest challenge for businesses waiting for the last minute to file their self assessment tax return is that they may not have factored in the additional payment on account due to be paid by the 31 January deadline, or indeed any National Insurance Contributions
   • Here’s a quick video explaining what payments on account are and how they are calculated: What are payments on Account?

10. Where can we find other resources to help?

• • HMRC website is very useful – that’s at gov.uk:  https://www.gov.uk/self-assessment-tax-returns 
  • Or if you want to cut through the jargon, we have a wide range of videos on our YouTube channel, and are adding more every month, that’s:
  • We regularly publish articles on our website and are active on both Linked In and Facebook, although the former probably more than the latter.  All links below, or of course, you can contact us directly if you have specific questions via email: askus@in-accountancy.co.uk or 0161 456 9666

https://www.youtube.com/@INAccountancy

https://www.in-accountancy.co.uk/

https://www.facebook.com/inaccountancy

https://www.linkedin.com/company/in-accountancy 

Sarah Harkness | LinkedIn

We’ve not made it as far as tiktok yet ????????‍♀️