Have you thought about the January tax return deadline? For the majority of self-employed workers who choose to file their annual return online, January still seems like a long time away.
But with under 100 days to go, HM Revenue & Customs (HMRC) is warning taxpayers not to leave it until after Christmas to fill it in.
According to the most recent data, some 300,000 customers completing last year’s return filed late, incurring an automatic £100 penalty.
And a further 758,000 customers narrowly missed a fine, filing their return on 31 January, the deadline day.
Now the financial year is over, the months leading up to the deadline are the perfect time to start preparing your annual return. Doing so allows you to find out how much tax you need to pay, and pay the money owed by the deadline – which HMRC says will take away a lot of stress over the holiday period.
Preparing ahead will not only help you calculate what you owe, but what HMRC might potentially owe you.
Use the time you have now to think about the running costs of your business and what items are potentially tax deductible. These can include office costs, travel costs, clothing expenses, staff costs, financial costs and advertising or marketing costs.
Likewise, if you use something for both business and personal use, you may be able to claim allowable expenses on the part used for business. Common examples include mobile phone bills, and if you work from home, heating, electricity, council tax, mortgage interest or rent and internet and telephone use.
Commenting on the January deadline, Angela MacDonald, HMRC’s Director General for Customer Services, said: “The deadline for completing self-assessment tax returns may be 100 days away, yet many of us wait until January to start the process. Time flies once the festive period is underway, yet the ‘niggle’ to file your tax return remains.
“We want to help people get their tax returns right – starting the process early and giving yourself time to gather all the information you need will help avoid the last minute, stressful rush to complete it on time. Let’s beat that niggle.”