Self-assessment season has crept up yet again, which, unless you submitted your return months ago, means blind panic, wildly rummaging through drawers full of receipts and a whole ton of stress.
So firstly, if you haven’t submitted your online self-assessment tax return you now have less than one month until the 31st of January deadline. Remember, failing to meet that deadline will result in a fine.
Okay, you’ve submitted your accounts now what…?
Following the submission of your tax return, HMRC generate a bill, which if you filed online will be available in either…
- The ‘view your calculation’ section after your tax return is complete but not submitted.
- As a final tax calculation in your HMRC account.
If you sent your return by post then HMRC will provide a paper calculation delivered to your chosen address.
It’s not complicated but…
Many people often assume that they must pay immediately when they submit their self-assessment tax bill, but this is not the case.
Payments on account
If your last self-assessment tax bill was more than £1000, or you’ve already paid more than 80% of the tax you owe, you will be expected to make two payments on your self-assessment tax bill.
The two deadlines for these payments are set at 6-month intervals, midnight on both January 31st and July 31st.
Each payment is half your previous tax year’s bill. If there is still tax to pay following this, then you must make what’s called the ‘balancing payment’ by January 31st the following year.
Underpaying versus overpaying
Here are some of the benefits of submitting your accounts as soon as you can rather than at the last-minute January:
- Stress-free filing: You’re not limited by that deadline. While no one will find filing a tax return ‘fun’, there is something to be said for making it stress-free. Who needs extra stress these days?
- Do it online and at your own pace: Filing your tax return early puts less stress on the system as that deadline looms. The more people that use the system, the more bogged down it gets, meaning that you could get locked out with no option to return online!
- Get support where and when you need it: Ask a family friend for help, or maybe you know someone who submitted theirs recently. Maybe it’s time to seek the services of a professional tax accountant to oversee that side of your business.
Ideally, avoid the stresses of late-filing and make your tax experience as easy as possible. Keeping organised, with key dates and deadlines visible, will ensure that payments are expected and budgeted for.
These things all make tax season that much easier to deal with. The trick is to get organised, stay organised and plan.