January is definitely the most depressing month of the year.
We’ve just got over the fact that Christmas is over and we have no money.
And for those of us who are self-employed, we now need to faff around with bits of paper and receipts in order to figure out how much more money we need to pay in tax.
You’re allowed to file your tax self-assessment months before the deadline, but we all know that’s not going to happen.
So if you’re anything like me, and you’re leaving it to the very last minute, here are 10 tips that might help:
1. Don’t put it off
If it’s late, you’ll automatically be fined £100, so make sure you take action now.
2. Pick up the phone
I may be stating the obvious here but for a long time, I didn’t dare call HMRC. Once I did, I realised they’re actually pretty helpful.
So if you’re not sure as to whether you can expense something, or can’t find a missing piece of paper, do give them a call.
3. Don’t panic if you can’t find your P60
P60s are sent out at the end of each tax year by your employer and you’ll need this to tell HMRC how much tax you paid through any other jobs you have.
If you can’t find yours, don’t worry – the information you need can easily be obtained by calling HMRC and requesting a written statement.
By law, an employer also has to provide a statement of earnings.
4. Use the simplified living expenses
If you’re working from home, it can be really time-consuming to calculate a percentage of the utility bills.
Try using the simplified living expenses method instead. (More info here.)
5.You don’t need a receipt for every single thing
For regular payments, bank statements can also act as proof.
You generally don’t need receipts to claim mileage either (but you will need to log your journeys).
6. Figure out a payment plan
If you find that you don’t have enough cash to pay your tax bill, instead of turning to borrowing or overdrafts, give the HMRC Self Assessment Payment Helpline a call first.
You may be able to arrange a payment plan with them and save a lot of money on interest according to Sam O’Connor, CEO of Coconut.
7. DIY isn’t always cheaper
It can be tempting to do it yourself, but using an accountant can save money in the long run since they can help you claim expenses and prevent any fines.
They are also insured against potential tax investigations.
8. Don’t wine and dine
Don’t assume that all of your expenses can be deducted from your income says Emma James from The Number Ninja.
Generally speaking, food and drink can’t be claimed, but there are exceptions.
9. Sign up to electronic solutions
Using electronic solutions could save you time on your tax return.
Subscriber software such as Quickbooks can help store your transactions and expenses easily (by connecting to your credit card and PayPal) while SimpleTax allows you to submit your return direct to HMRC via their software.
10. Remember your student loan
If you’re repaying the cost of your student days, don’t forget to disclose the student loan repayments you made during the year.
Remember that if you have income other than PAYE, you may have more to pay towards the loan, says Tim Walford-Fitzgerald from HW Fisher & Company.