Monday 14 October 2019

Best Tips for Self-Assessment Tax Returns in the UK

Self-Assessment is a procedure of valuation in which you report all of your employment earning records, and deducted taxes via PAYE. PAYE is a method of payment of income tax each month. In this method tax gets deducted from the salary each month. One does not have to go manually for the payment of their taxes. If you are receiving a pension or have any investment income other than your monthly income then self-assessment tax returns become mandatory for you. Under this method, you submit an online report of your income and expenditures. It is compulsory to fill this return annually. An automatic calculator is available on the website of HMRC that helps in calculating self-assessment tax.

Tips for Self-Assessment Return

There are some prerequisites for the submission of the self-assessment tax return. By fulfilling them you are can easily assess your taxes. They are as follow:
  • You should keep a record of every happening of business if you are sending a Self-assessment report to HMRC.
  • Daily Recording of sales and purchases helps in estimating business weekly and yearly earnings.
  • Report on incomes and expenditure should be made for bookkeeping to use it in the tax return.
  • A separate tax account should be maintained by the business that keeps the record of tax payable and tax reclaims.
  • Listing of company’s all assets and liabilities, all sources of income, accounts payable and accounts receivables should also be in the record of the business.
  • You should have as many copies as u can. Like Copies of your bank statements, pay in slips, copied invoices, etc.
  • Use the word Provisional or estimated when filing a tax return. Provisional means that you will arrange all the records later to confirm the figures you have given in tax return. Estimated means that your figures are not confirmed and you will not be able to arrange any documented proof of these figures.
  • Always use the self-assessment tax calculator given on the official website of the HMRC as it is a well-designed calculator according to the requirements of HMRC to file a tax return.
  • You should keep your records safe at least for the next two years at least. HMRC can demand your documents at any time for the verification of the amount of taxes you are paying.

For the employees, they should keep the following documents with them to fill the return correctly.
  • P45-It is the document that shows the record of the date you left your job and all the paid tax till that date.
  • P60-If you are currently an employee of a certain company, this reflects your pay and the tax of the current tax year.
  • P11D form- this form shows all of your incentives and perks you are enjoying in addition to your salary.
  • Taxed Award Schemes certificates
  • Information about any termination of payment.

Records of employee expenses

If you are paying anything from your pocket for the sake of your job-related work then you should keep the record of all these expenses to claim the deduction on your taxes.

No comments:

Post a Comment