Tax Self Assessment forms: Seven practical tips to complete your tax returns stress free | Personal Finance | Finance

Owing to pressures brought on by the Covid pandemic, this year’s system for anyone filing their Self Assessment tax returns has been altered slightly to allow those who submit beyond the original deadline to avoid penalties. Typically, this process can spring up a few surprises as well as being time consuming. So, how can you ensure things go as smoothly as they possibly can? Here’s seven practical tips to help you complete your Self Assessment returns for this year.

Caroline Miskin is a Chartered Accountant who works for the Institute of Chartered Accountants in England and Wales (ICAEW).

Since joining in 2016 she has held the role of Technical Manager – Tax Practitioner Support and Private Clients.

Below she has outlined her seven best pieces of advice for anyone who has yet to complete their 2020/21 Self Assessment tax returns.

1.) Check whether you need to complete a return

Not everyone has to complete a Self Assessment tax return. Ms Miskin advised that you call HM Revenue and Customs (HMRC) on 0300 200 3310 if you aren’t sure or need them to issue or cancel a return.

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4.) Claim all your entitlements

Ms Miskin said people need to remember that the £312 annual allowance for working from home is available.

This applies if an employee was required to work from home for even one day and should be claimed in the employment section of the tax return.

She also added many couples fail to claim Marriage Allowance, which is usually beneficial where the income of one is below the level at which tax is paid.

5.) File by the deadline to avoid a penalty

Although the deadline for Self Assessment was last Monday (January 31) HMRC has said that it will not charge late filing penalties for returns filed online by February 28.

A £100 penalty is charged if that date is missed, and further penalties are charged if the return isn’t filed by May 1.

6.) If you can’t afford to pay, you should still file the return

Alternatively, payment in instalments can be arranged online or by contacting HMRC.

In fact, paying or setting up a payment arrangement by April 1 avoids a five percent late payment penalty on top of interest which is charged from February 1.

7.) Start earlier next year

Ms Miskin insisted that filing earlier reduces stress and allows you to budget for your tax bill, and you don’t have to pay the tax any earlier.