Four reasons why you need to think about your Self Assessment tax return

Four reasons why you need to think about your Self Assessment tax return

Whether you are self-employed, have just started out freelancing or you’re doing additional work alongside your main job, now is the time to start thinking about your Self Assessment. Although you’ve got until 31 January to submit your return, the sooner you look at it the better. Matthew Barton discusses some key points to consider and why you should submit your 2020/21 return early.

The right time to pay

At present, HMRC are still open to negotiating payment plans, although over time are they becoming less flexible on than they were at the height of the pandemic.  So the earlier you finalise your return, the sooner you can start speaking to them about a payment plan if required.  The more time you have to do this, the higher the chance of getting a strategy in place to help you manage your cashflow.

Loss carry backs and refunds

Given the events of the last 18 months, it’s possible that, like many other businesses, you may have incurred business losses. If so, it’s definitely worth considering your options for carrying your losses back which can potentially generate a significant refund of tax.

It was announced earlier this year that the normal one year carry back for trading losses would be extended to three years, to give greater options.  If you are in a position to do so, earlier completion of your return will accelerate any refund being obtained.

Including self-employment grants

For those who have faced financial difficulty over the pandemic, the Self-Employment Income Support Scheme (SEISS) played a crucial part of the support package to assist struggling businesses. This is taxable in the same way that your regular income would be.

You need to take care to ensure this is correctly disclosed, to avoid HMRC making automatic adjustments which could result in an incorrect tax assessment against you.

Understanding capital gains

Awareness of Capital Gains Tax (CGT) still remains low, and as a result we’ve seen a lot of people getting caught out over the years. Whilst the Government have followed the OTS’s recommendations and extended the deadline for residents to report and pay Capital Gains Tax after they have sold a property from 30 days to 60, it’s vital to remember that you still need to report these gains on your tax return. It is also crucial that you include the right information on the tax you have already paid so that this is correctly taken into account by HMRC.

Supporting you with your Self Assessment tax return

If you require any support with your Self Assessment tax return or just need reassurance that you are meeting your obligations, please contact us on 0113 398 1100 or email leeds@hwca.com