5 tips for a quick and painless self assessment - Penny Freedom

5 tips for a quick and painless self assessment

As a freelancer, dealing with tax returns is probably pretty low down on your love-to-do list.

You can file your self-assessment tax return as soon as the tax year ends, so if you haven’t completed yours yet, here are our top 5 tips for making the process as stress-free as possible.

1. Don’t leave it to the last minute

If you don’t file your personal tax return by midnight on 31st January, you will immediately be hit with a £100 penalty with a further £10 added for every day after that up to 90 days, plus interest. You may be able to appeal the penalty, but it will take you time and effort, and there is no guarantee you will be successful.

Yet a huge number of people still literally leave it to the 11th hour. According to HMRC the busiest online filing days in the 2016 season were 30th and 31st January with close to 1 million returns filed over those two days.

2. Make sure you can log in

You won’t be able to submit your tax return online unless you have registered with HMRC and have a login for the Government Gateway. You will also need your Unique Tax Reference (UTR). This is a 10-digit number which will be on your self assessment paperwork from HMRC.

3. Get the paperwork together

Before you start, make sure you have all the paperwork you need to hand. This includes records of all your personal and business income and expenditure including a P60 or P45, P11D, invoices, dividend vouchers, bank statements and receipts.

4. Check and double check

Now to work your way through the form. Make sure you complete every section correctly and leave time to thoroughly check every part of your self assessment before you hit submit. Even a simple mistake, such as not ticking the box at the end to confirm everything is correct, could result in your return being rejected and HMRC imposing a penalty.

5. Learn from your mistakes

If you have spent hours tracking down paperwork or worrying how you are going to pay your tax bill, take steps now to avoid the same headaches next year. Get organised! Keep your financial records up to date – you can do it on paper, digitally or using specialist accounting software. Put bank statements, invoices and other important documents in a file (digital or old school!) so you can locate them easily.

You may also find it useful to open a specific savings account and regularly deposit a portion of your income to cover your tax bill.

Penny fact – For your tax records you can easily export all your invoices from the Penny app, so you know where to find them when it comes to doing your self-assessment tax return.