Updated: Jan 27, 2019
There's no question about it, it's tax return season. Yesterday I pitched my business at a networking event, it was one of those things where you go around the group and introduce yourself in sixty seconds, never my favourite thing to do. When I got up to go and get my lunch from the buffet, a member of the waiting staff came up to me and said "are you the one who said you do tax returns?". We had a chat and I gave her my card.
She told me the problem was that she was finding it all quite confusing and didn't know where to start and this is the case for a lot of people I speak to. People who ask me to complete their tax returns generally fall into three categories:
- People who find the whole process complicated and would rather leave it to somebody else
- People who had something particularly complex going on last year and definitely need the help of an expert
- People who may or may not want to do their own tax return but just don't have the time
Something else which is definitely common is that people are frustrated that they can't always get their tax return completed in one sitting. If you've ever tried to do your own, you'll know that you can save as you go along and log back in to add extra information when you have it, if you didn't have it all in the first place, but people find this frustrating and most people I speak to just want to get it done in one sitting.
I'm working on a lot of tax returns at the moment, and I thought it would be helpful to share some of the steps I follow to give you the best chance possible of being able to complete your tax return in one sitting if you want to do it yourself.
Make sure you can log in
The very first thing you need to be able to do is to log into HMRC's website so that you can submit your return. If this is the first time you'll be completing a tax return, you almost certainly need to register online and wait for an activation code in the post.
Think about your income
Now you need to think about all the sources of income you received in the tax year and remember that a tax year runs from 6th April to 5th April the following year.
I find this out by sending my clients a questionnaire, but common sources of income my clients include in their tax returns are:
Self employed income (and expenditure)
Bank and savings interest
Child Benefit and other benefits
There are others, and as you fill in your self assessment return you'll be prompted to think about whether you received any income which is relevant.
Find the evidence to prove it
This is the bit where I think many people feel like they have bits of paper everywhere, but this is really critical to being able to accurately complete your tax return. So that you have the figures to hand when you fill in your tax return you need to find proof of each source of income for the year and any tax you've already paid. This is the evidence I'd suggest you dig out.
Self employment income
Make sure your business accounts are up to date. You'll need to tell HMRC about both your business income and your business expenditure. The other question that people are often caught out on is whether they're using the cash basis or the accruals basis, so be clear on which accounting method you've used in your business.
If you were in a partnership, you'll need to make sure your business partnership return is completed already as you'll need details of your share of the partnership profits for your tax return.
Your employer will have given you a P60 setting out your income for the year and any tax and student loan deductions if applicable. If you left your employer during the year you'll have a P45 instead of a P60. If you had more than one employer during the year you'll need a P60 or P45 from each one.
Bank and savings interest
For each account, find out how much interest you earned in the year and whether any tax was deducted at source by the bank.
If you hold any shares, have any paperwork to hand which sets out details of dividends you've received during the year.
If you earned rental income during the year you need to have details of income and expenditure related to the property available.
Child benefit and other benefits
Not all benefits are taxable and HMRC have a list on their website of any which need to be included in a tax return. You will need to tell HMRC if you received child benefit, but there is only a tax implication if you or your partner were earning over £50,000 during the year so it's worth checking with your partner their income if you don't know.
Student loan - if you have an outstanding student loan you'll need to note this on your tax return and you'll need to know whether you're on plan type 1 or 2. I'd suggest having a student loans statement handy for this part.
Charitable giving - if you gave to charity during the year, I'd suggest having a list of those donations as this will be useful for the charitable giving section.
Everybody's financial affairs are different and this post is by no means exhaustive, but it covers the income I see in the large majority of cases, so if you want to try to complete your tax return in one sitting, here's the paperwork I'd suggest you pull together before you get started.
Business accounts if you're self employed
Partnership return if you're in a partnership
P60 or P45 from employment
Bank interest details
Rental income and expenditure
Details of any benefits
Student loans statement
List of charity donations
And of course, if you need any help with your tax return or you decide this is just too much to think about, please get in touch, I'm always happy to help.