With the new tax year having started a couple of weeks ago, is now a good time to start looking at your 2019 Self-Assessment return?
Self-Assessment tax returns can be daunting – forms, deadlines and penalties and everything else that comes with it. However, many decide to take on the complex task themselves thinking that it will save them time and money. But is this always the case?
Below we look at the common problems faced when deciding to complete your own taxes.
Record Keeping
Staying organised with records. It is a legal requirement to keep invoices, receipts and statements to prove what your claiming as tax deductible. These records must be kept for at least 5 years and ten months after the end of the tax year the records relate to. Failure to maintain or retain the records can result in fines up to £3000. There are many ways to keep records including online software – if you are not familiar with this it can be time consuming to figure out.
Claiming expenses
One of the most common queries is “what expenses can I claim?” There is no easy answer to this, but an accountant will be able to help and advise you, often decreasing your liability. With a whole list of what expenses can and can’t be claimed, there can be issues if you are not familiar with them.
Not knowing what to declare
You are required to report everything that you’ve earned over the tax year. This includes income from employment, self-employment, property and gains on savings and investments. This area is complex. For example: even if all your savings and investments are in high street banks you still have to declare them, despite the fact no tax may be due.
Being unaware of annual allowances and tax reliefs
There are various allowances and tax reliefs that can help reduce your tax bill, which if you aren’t a professional you may not be aware of. Examples include: Capital Gains Tax (CGT) Allowance, Annual investment allowance, Marriage allowance, Personal Allowance, the list goes on…
More stress, less time
Your return must be complete and accurate and you need to make the most of your tax reliefs and allowances. If not this could land you with penalties, extra tax to pay and spending time correcting previous mistakes…
Although you may still be up for the challenge, there are plenty of opportunities of getting things wrong which could result in you paying more tax and even leading to an investigation from HMRC. With the help and experience of an accountant, you can save time and unnecessary stress whilst ensuring your tax return is as efficient as possible.
If you would like our assistance with your tax return or a different matter, don’t hesitate to contact us on 01268 770099. Relax knowing you are in the hands of an expert.