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Self Assessment Tax Returns With HMRC

I have been self-employed for 3 years now. I have filled out 2 self assessment tax returns with the HMRC, and I have another due to be filled in the next few weeks. My experience with the self assessment tax returns with HMRC has been good. I found my first experience a lot more scary than the second. Which is perfectly understandable as that was my very first time submitting my tax returns. But since then, it has been great.

HMRC website is user-friendly and pretty self-explanatory. I found the filling out of the tax returns quite straight forward for me. But that may be because I have a degree in Accounting, and I am married to a qualified accountant. So whenever I get stuck, he comes to the rescue. It could also be because of great online resources like Talk Tax. For those who have never heard of Talk Tax before, it is a great website set up in 2014, that provides hard to reach HMRC contact numbers and articles to inform readers about policy change/benefits/ self-assessment and more.

 

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When it comes to getting important things sorted, like my tax returns, I don’t play. I take it very seriously. I believe in being proactive and not reactive when it comes to tax business. And that has helped me stay on top of my business.

These 2 tips for filling out your self assessment tax returns have come in handy for me, and they may work for you too.

 

Start Early

This is the first and most important tip when it comes to filling out your tax returns. You need to be an early bird, and start early. So when the window opens in April, you get it submitted before the summer months. That way you have the time to spread your tax and national insurance payments (if any). Starting early also means you will have the time to take your time filling out your tax returns properly.

When you leave it all until the last-minute, you start to panic so you rush, and you are more likely to make mistakes. You may also have to go into debt to pay your tax bill if you are not prepared. January 31st is the cut of date for self-employed self assessment tax returns, and many people struggle to pay up their bill before the end of January since most of the money has been spent on the Christmas shopping. Plus January is usually a quite month for most businesses. Which is why I like to get mine done long before then. Don’t leave your tax returns until the last-minute.

 

Keep Records

Starting early would work great if you keep records. Ensure you have a spreadsheet for every invoice you send and for any money I spend or receive. Having records will ensure you fill out your tax returns with the right figures quickly. It makes the process a lot easier.

The last thing you want is to fill out wrong information on your tax returns. That would land you in trouble quickly with the HMRC. Having up to date records means you won’t have to guess any figures.

 

Many people are usually frightened when it comes to anything tax related and I understand why It is because they are not well equipped and usually not informed. There are loads of information around to help you submit your tax returns yourself and if you are unable to do so, you can always hire someone else to sort it out for you.

Remember, if  you don’t complete a Self Assessment return for each tax year before the deadline, you will get a penalty fine. This penalty starts at £100 for delays of up to 3 months but will increase the later you leave it. HMRC may also charge you interest on late payments. So ensure you get your tax returns in before the deadline.

 

How do you find the process of submitting your tax returns? Easy or complicated?

 

*Collaborative post.

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Amending Mistakes on your Tax Returns

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I wrote a post about filing your tax returns as a freelancer some months ago, and it was well received. So this post is really just a follow-up post, to answer some questions that were asked in the comments and via email.

I set up this blog – Fashion and Style Police in October 2012. And then I knew little or nothing about how bloggers make money. I just wanted an outlet to write. So filing a tax return or registering as self-employed was the last thing As the blog grew, I started getting sponsored posts requests (I wrote all about these in my book, check link directly above) and then I started to think about best ways to send out invoices, registering myself as self-employed and filing the ‘Almighty’ tax returns.

The number question that was asked by many bloggers and freelancers is – “What to do when you have made a mistake filing out your tax return“, followed closely by “How best to keep track of your finances” and “To employ an accountant or not to employ an accountant”.

Here are 3 tips you should answer these questions:

 

Submit your Tax Returns Early

Submitting your tax returns is the first step in getting the process right because you are more likely to complete your tax return without errors when you submit it early. Panic, rush and anxiety usually leads to mistakes. I like to submit my tax returns by May/June (tax year ends April) after the tax year-end even if I have till January. I like to sort out important stuff quickly. And plus if I do make a mistake on my tax returns, I have 12 months to amend it on the HMRC website. So it is better to submit early just incase there are any errors.

 

Check and Check Again

I check my tax returns multiple times before submitting, just incase I missed an error or not included a vital information. I usually get a fresh pair of eyes to check with me as well. It is better to be safe than sorry.

 

Speak with an Accountant

If you are not on top of your finances, to busy to deal with your tax returns or you rather just employ a professional, then speak to an accountant. Sometimes it is best to let the professionals do the work they are trained to do. If you don’t have a budget for an accountant or you are not earning much from your self-employed career, then you may attempt to file your tax returns yourself. I did, and trust me, it is not as difficult as it appears to be. It is quite straight forward, and there are loads of information on the HMRC to guide you. You can aslo call the HMRC office if you need clarification on any tax related issue. The best times to call are Tuesday to Thursday, between 8.30am – 10am, 11.30am – 1pm and 2pm-4pm, but lines are usually open at at 8am Monday – Friday.

 

Do you struggle with filing your tax returns?

 

*This is a collaborative post.

 

 

 

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