It’s Self Assessment season, it’s time to call your accountant

As we get closer to the 31st January taxpayers across the land will start to worry about their self assessment tax returns.

Many tax payers will be frustated and confused by the information needed, just like the lady in the video above.

You’ll need to send a tax return if, in the last tax year:

• you were self-employed – you can deduct allowable expenses
• you got £2,500 or more in untaxed income, for example from renting out a property or savings and investments – contact the helpline if it was less than £2,500
• your savings or investment income was £10,000 or more before tax
• you made profits from selling things like shares, a second home or other chargeable assets and need to pay Capital Gains Tax
• you were a company director – unless it was for a non-profit organisation (such as a charity) and you didn’t get any pay or benefits, like a company car
• your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit
• you had income from abroad that you needed to pay tax on
• you lived abroad and had a UK income
• you got dividends from shares and you’re a higher or additional rate taxpayer – but if you don’t need to send a return for any other reason, contact the helpline instead
• your income was over £100,000
• you were a trustee of a trust or registered pension scheme
• you had a P800 from HMRC saying you didn’t pay enough tax last year – and you didn’t pay what you owe through your tax code or with a voluntary payment

If you have a question and don’t have an accountant taxpayers have 3 main ways to contact HMRC:

• Online
• Phone
• Post

Based on last year it could take 47 minutes at this time of year to get to speak to someone at HMRC!

Here are 10 of the most common problems faced by tax payers who don’t have an accountant

1. Not leaving enough time to register for Self Assessment – It can take 20 working days (this is usually 4 weeks) to complete the registration process, then for online returns, allow 10 working days (21 if you’re abroad) to register because HM Revenue and Customs (HMRC) posts you an activation code.
2. Lost Login details – Your account will be locked for 2 hours if you enter the wrong user ID or password 3 times.If you’ve lost both your user ID and password:
   • individuals in Self Assessment can request new ones (allow 7 days to get them by post) or sign up with the GOV.UK Verify trial
   • contact HMRC for all other online services
3. Leaving it too late to get help – If you need help from an accountant don’t leave it too late as they will need to carryout AML and other checks before they can file your return, they will also need your UTR
4. Failing to complete all the parts of the return – For example leaving out PAYE information
5. Failing to press ‘submit’ – you would be surprised how many people complete the return and then stop without submitting or leave submission and then forget to do it
6. Missing out details of your Pension Provider
7. Failing to check the calculation – Most people do a rough calculation of what they owe but fail to check the HMRC calculation only to find out they have made a mistake
8. Using invalid characters such as # ‘ ” in boxes where these are not allowed
9. Not paying the tax they owe by 31st January
10. Failing to explain where estimates and provisional sums have been used

To complete a self assessment return, the most common things you will need to know are:

• Employment Income – P60 and P11D
• Child Benefit
• Pension Contributions – statement from provider
• Donations to Charity
• Bank and Building Society Interest
• Dividends
• Buy to Let Investments, Holiday Lets and Second Homes
• Other Income
• Employment Expenses not paid by your employer including mileage to approved rates and clothing
• Professional Memberships related to your job and on HMRC List 3
• Home Office Expenses
• Capital Gains

Many tax payers are unaware of tax allowances and expenses that they can claim and often this means they end up paying too much tax.

For example employment expenses such as Flat Rate and Mileage.

Property Investors should be claiming

• Mortgage or Loan Interest (but not capital)
• Repairs and maintenance (but not improvements)
• Decorating
• Gardening
• Cleaning
• Travel costs to and from your properties for lettings or meetings
• Advertising costs
• Agents fees
• Buildings and contents insurance
• Ground Rent
• Accountants Fees
• Rent insurance (if you claim the income will need to be declared)
• Legal fees relating to eviction

Using an accountant will help you get your tax affairs right

steve@bicknells.net