Six steps to last minute tax returns

1. Collect your tax information early

For all communication with HMRC you will need your Unique Taxpayer Reference (UTR). You should have received this when you first registered for self assessment and you will often find it on any communication from the tax office. If this is your first year of Self Assessment or you can’t find your UTR contact HMRC today – it can often take up to two weeks to receive your UTR through the post.

2. Find your paperwork and keep it safe

To complete your personal tax return (or pass it on to an accountants like us to submit) you will need some key data and information. This is likely to differ for every person, but some of the things you may need are:

• Employment – you will need your turnover, costs and profit from your self employed income. This will come from your bank statements, sales invoices, receipts for any expenses and other information relevant to your business. If you have actually been employed you will also need your P60 or P45.
• Rental Income – if you have a property you let and the income is above £1000, this needs to be declared to HMRC (even if you don’t make a profit). You will want all of your income, expenditure and agreements to hand.
• Savings – If you have any savings, pensions and dividends you will need any proof, certificates and information for these as well.
• Other –  If you received any other taxable benefits such as private medical insurance, you need your P11d.

3. Know the rules, make the claims

Without the proper knowledge on what you can and can’t claim on your personal tax return you could end up paying much more tax than you have to.

Did you know you can claim expenses for working from home (even if you just raise invoices or do paperwork there) and other costs such as mileage?

4. Log your expenses

You will be surprised how many people forget about, or do not claim certain business costs which could reduce their personal tax bill. You will be spending this money anyway, so why not claim it against your business.

Depending on your industry there will be a large number of different costs which you can claim and ultimately anything which you need to run your business is often a deductible expense in one way or another. This may include; stationery, postage, phone calls, travel, advertising or marketing, legal and even accountancy fees.

If you log all of these from the start and continue to do so it will be much easier to track when it comes to your self assessment tax return. If you’re unsure if something may be counted as an expense, please ask us or you can contact the HMRC self-assessment helpline.

5. Submit your tax return

Once you have all of the information and you are happy with the figures you have inputted you will need to submit your personal tax return. You will do this through the HMRC website and you will need your Government Gateway login to hand.

Alternatively – keep it simple and pass us the figures and we will file on their behalf.

6. Don’t forget to pay

Perhaps the most important part, but often the hardest – paying your tax bill if any is due. Whilst your return must be submitted by the 31st January, your payment must have also reached HMRC by that day. If you pay by a debit card this is usually instant however it is often wise to allow an extra day. If you pay by BACS or direct debit, this can can take up to three days (or five days if this is the first time you have paid HMRC by direct debit). Once you have paid, it will take between three and six days to see your payment on the electronic HMRC system.

Depending on the amount payable, we may be able to lower the payments on accounts required for next year, and if under £3,000 possibly elect for HMRC to take this from over a period of time via your tax code rather than pay the cost now upfront.

What if you are due a tax rebate?

If you believe you have paid too much tax, the best way to start the claim process is to request online at https://www.gov.uk/claim-tax-refund. Whilst the HMRC system should pick this up automatically, it is always best to give them a little nudge by using the above form.

That is it, 6 tips for making your tax returns as simple as possible. Of course, the easiest way of them all is to contact us and we can do all the hard work for you. But we understand that is not always an option. If you would like to talk through your tax return you can contact us on 01603 617361 or email us at info@murrells.co.uk.

We expect checks to increase in the next few years as the the government will seek to audit and possibly claim back monies from COVID-19 related support schemes. We are likely to see more compliance checks to ensure schemes such as Job Retention and Self Employment Income Support were administered correctly and within the guidelines.

For those that are unaware or have previously not required it, Tax Investigation Insurance covers your accountancy fees in the event of an HMRC tax enquiry. Often tax enquiries are lengthy and, aside from the undue stress and inconvenience, will generally cause you to incur additional accountancy fees in acquiring professional assistance in dealing with HMRC, even if you have done nothing wrong.

Whilst the insurance policy does not cover any tax found to be owing, it will cover accountancy fees entirely, so you can leave the investigation in professional hands without any consideration for the accountancy costs. With this, accountancy firms like ours can then devote all of our efforts to prepare the best defence of any taxation issues and negotiate the best possible outcome for you or your business.

In addition to covering Corporation Tax, VAT, Self Assessment and all of your other regular ongoing taxation affairs, the policies we provide will now also cover any enquiries relating to HMRC’s Covid-19 support schemes.

Policies begin at just £40 + VAT and increase depending on your taxation requirements. If you wish to find out more about this or would like a quote for your business then please don’t hesitate to contact us. Is there really a cost to complete peace of mind?

However we understand that might not be the same for everyone and sometimes last minute requests are beyond your control. Either way we have the capacity to help and ensure you beat the 31st January deadline.

Do I need to submit a tax return?

You need to submit a personal tax return if you are:

• Self-employed as a Sole Trader and earned more than £1,000 (before taking off anything you can claim tax relief on).
• A partner in a business Partnership.
• A director of a Limited Company and paid some monies by dividends.
• Renting out a property.
• Receiving some of your wages from tips and/or commission (dependent on how these are paid).
• Receiving income from savings, investments and dividends (dependent on value).
• Receiving foreign income.

What information do I need for my tax return?

Whilst every tax return is unique, to be able to submit we will often need the same information from everyone. This includes:

• UTR (Unique Tax Reference)
• Personal Information such as Name, Address, Date of Birth and National Insurance Number
• Income and Expenditure between 6 April 2019 to 5 April 2020.
• Any additional income, the most popular being;
  • Pensions
  • Savings
  • Rental Income
  • Student Loans
  • Share or Capital Gains
  • Alternative Income

What is the process for Murrells completing my tax return?

In just a few easy steps, we can submit your tax return in a matter of days.

1. You send us your information (stated above);
2. We check your documentation against our standards before completing a draft tax return
3. We send this back for checking and include any queries (such as possible tax relief or claims you may be entitled to)
4. You approve
5. We submit

Whilst every personal tax return is different, after completing thousands each year we follow some key steps to ensure the process is as easy as possible and thus we can often turn them around much quicker than other local accountants.

Personal Tax Return Key Information

• Deadline of 31st January 2021 for completed tax return and payment.
• For the tax year 6 April 2019 to 5 April 2020.
• 31 July 2021 for any future payments ‘on account’.

Working from home tax relief is usually worked out on a per week figure which you can then multiply over the course of a year to a maximum of £62 for those in the lower tax bracket or £124 for those in the higher tax bracket. However due to the huge increase in claims this year from the Coronavirus Pandemic, HRMC have set up a simpler system for this year only which allows you to claim the maximum amount as long as you have worked at home ‘some of the time’ (link to external MSE).

The total relief is £6 per week, which equates to a gain of £1.20 a week for a basic 20% rate taxpayer and £2.40 a week for a higher 40% rate taxpayer. You are unable to claim this additional relief if your employer is already paying you additional costs for working from home.

How to Claim Working From Home Tax Relief

The easiest way to claim is to head to the HMRC microservice that has been set up especially to support this new claim and can be found here. You are only able to claim as an employee of a company, those that fill out a self assessment tax return should detail their expenses there.

If you are unsure if you are able to claim, please get in touch and we are happy to talk this through with you.

Please note the following before starting:

• The online registration process usually takes around 10 minutes to set up.
• You will require the following items:

• • • your National Insurance number
    • a recent payslip or P60 or a valid UK passport
• Please visit  the following weblink: https://www.access.service.gov.uk/login/signin/creds
• Below the green button that states ‘Sign In, select the ‘create sign in details’ option
• Enter your email address
• HMRC will email you a 6 digit code (you should receive this automatically) – enter this code and press ‘continue’
• Enter your full name
• Create a password
  • Please note, your password must:
    • be between 8 and 12 characters
    • have at least one number (0 to 9)
    • have at least one letter
    • not contain special characters
• You will next be required to set up a recovery word incase you forget your password
  • Please note, the recovery word should:
    • be between 6 and 12 characters
    • not contain spaces or special characters
    • not contain numbers

• HMRC will then provide you with a Government Gateway ID – this is 12 characters long. Please record number as this will be your username to login.
• Choose the type of account you want to create, select ‘Individual’
• You will now need to set up additional security – HMRC will want to send you an access code
  • There are three options
    • Text message – Get codes sent to a mobile phone.
    • Voice call – Get codes by automated message to a UK mobile or landline.
    • Authentication app for smartphone or tablet – Get codes generated by an authentication app on your mobile device such as a smartphone or tablet.
  • Choose the option which is most suitable for you. In this example I will select the text message option.
• Select ‘Yes’ to the mobile being a UK mobile number and enter your telephone
  • HMRC will send you a text message immediately with a 6 digit code – please enter this code
• You will now need to confirm some security questions
  • The options you will need to complete are:
    • First Name
    • Last Name
    • National Insurance Number (If you do not know your NI number, you can select the option to enter you address instead)
    • Date Of Birth
• Next you will need to confirm your identify.
  • The options available are:
    • Payslips – It needs to be a payslip from the last 3 months
    • Multiple choice security questions – For example, select your credit card provider from a list
    • Passport questions – You need a valid UK passport
    • P60 – You’ll need your most recent P60
  • In this example I have chosen ‘P60’
• You will be asked the following ‘how much salary did you earn last year?’

• • The answer must include pence
• Next it will ask you for ‘how much National Insurance did you pay last year?’
  • You can find the amount on the right-hand side under the header ‘Employee’s contributions due on all earnings above the PT (Primary Threshold)’
  • The answer must include pence
• You have successfully now set up an HMRC Government Gateway login.

Feeling overwhelmed? Why not contact us today on info@murrells.co.uk and we can complete your tax return for you, it’s cheaper than you think – Murrells, Norwich Accountants.