Completing Your First Self Assessment
Completing your first Self Assessment tax return can seem like a daunting challenge. But completing and filing your tax return is a legal obligation, and therefore a process with which you will have to become acquainted.
Filling in the form itself is actually one of the least arduous parts of the Self Assessment rigmarole. In fact, the process is lengthier than that – but these simple steps should help to ensure that it goes off without a hitch.
Record KeepingThe first step towards completing your Self Assessment begins before you have even received a Notice to File. Record keeping is a vital part of the Self Assessment process, apart from being a legal necessity, and it is vital if you are to be able to complete your return accurately.
You should keep comprehensive records throughout the year detailing all of your income, and any business expenditure. You may wish to consider investing in simple bookkeeping software to help you keep track of your receipts; this will help you significantly when you come to enter total figures into your return.
Online or on Paper?Self Assessment taxpayers still have the choice of filing online or on paper – although it is suggested that the entire process may soon be moved online.
If you intend to file your return online, you need to register for the service first. This is very important – every year, thousands of taxpayers miss the filing deadline (and incur a financial penalty) because they have not already registered. It can take some days for your registration details to arrive, so you should do this well in advance, through the HMRC website.
Choose a DeadlineThere are several filing deadlines over the course of the year, and your choice will depend on whether you intend to file online or on paper.
30 September following the end of the tax year is the first deadline for paper returns. You must file by this date if you are filing on paper and wish for HMRC to calculate your tax payments. If you are filing online, your tax return must reach HMRC by 30 December following the end of the tax year if you owe less than £2,000 and wish for it to be collected through your tax code. Finally, if you have not already filed, your tax return must reach HMRC by 31 January following the end of the tax year. Failure to file by this date will result in a £100 fine.
Fill in the ReturnFilling in the return is not as complicated as it looks. It is split into sections, some of which will apply to you and some of which will not. If your tax affairs are more complex, or if you need to declare income from a trust, you will need to fill out one or more of the Supplementary Pages. These can be ordered by calling the Self Assessment Orderline on 0845 9000 404; alternatively, they are automatically available if you are filing online.
If you have kept good records, filling in your tax return will be as simple as entering figures in boxes. If you are filing online, the software will automatically calculate your total liability for you.
Check Your FiguresFinally, it is vitally important that you check your figures before submitting your return. It is not uncommon for taxpayers to be fined for having made honest mistakes, so you should make absolutely sure that your figures are correct.
As long as you are well prepared and give yourself enough time, completing your first Self Assessment should not be too traumatic. As the slogan goes – tax need not be taxing.