1. Get your paperwork in order
It’s one of the main reasons people leave their tax returns to the last minute: not keeping their records organised during the preceding 12 months. The fundamentals, though, boil down to just two things.
You’ll first need details of any untaxed income from the 2019/20 financial year (so any self-employment income, plus dividends or interest on shares). Then, you’ll need records detailing your self-employment expenses (some of which may be found in your emails, in case they’re not to hand).
2. If you’ve lost receipts, you may still be able to claim
Receipts aren’t the only evidence of a transaction, even if you paid in cash. So, if your bank or credit card statements can’t help, proof that an item is in your possession – plus a record of where you purchased it from – might.
Remember also that you can claim flat rates for expenses like working from home (up to £26 per month), mileage (45p per mile for the first 10,000 miles; 25p for subsequent miles), and living in your business premises.
3. Don’t miss the deadline because you’re waiting for documents to arrive
A common problem is waiting for outstanding paperwork to confirm particular figures. Don’t wait, however, until it’s too late – instead, estimate the figures yourself and, when you eventually receive the actual figures, submit an amendment to HMRC. Remember that you may be fined if your estimates are markedly different to the real figures.
4. Know how you’re going to pay your bill
You’ll need to settle your tax bill by the 31 January deadline as well as submit your tax return. If you need to pay more than £1,000, you’ll also be required to pay an instalment equal to half of your projected tax bill for 2020/21. This is known as ‘payments on account’. Remember that HMRC does not accept credit cards as a form of payment. If you can’t pay, you may be offered a repayment plan – with, inevitably, interest payments.
Note that those who took advantage of the government’s offer to defer July 2020 payments on account – after the fallout from coronavirus – must settle their outstanding payment by 31 January.
What does HMRC see as ‘reasonable excuses’ for filing your tax return late?
In short, anything that’s beyond your control. Examples include:
- Developing a serious illness
- Being confined to hospital
- Your partner or another close relative dying shortly before the deadline
- Your computer or accountancy software failing
- Problems accessing HMRC’s online services
- Being the victim of a fire, flood or burglary
