Your Tax Return – Getting It Right

Angela MacDonald

Angela MacDonald, HMRC’s Director General of Customer Services

Filling in your self-assessment tax return online, by Angela MacDonald, HMRC’s Director General of Customer Services

Filling out your online tax return may not be top of your ‘to do’ list this Christmas but you need to get your skates on if you have yet to file your return for the 2017-18 tax year by the January 31 deadline. It does require some time and concentration, as it’s easy to make a mistake if rushed at the last minute.

First, you will need to register at Gov.UK. Have some identification to hand, such as your passport, National Insurance Number and bank details. Your tax is calculated automatically as it’s filled in but you can save your progress and come back to it later – it doesn’t have to be done in one sitting.

Here are few things to bear in mind:

1. Income and Expenses
Before starting, you should have a clear idea of what your total income is, and any employment benefits you received.

Check your all-important allowances and expenses in order to claim all the tax relief you are entitled to. HMRC also needs to know about your work expenses. These are defined as either ‘travelling to your job’ or ‘other expenses you had to pay in doing your job – and ONLY to doing your job’.

2. Annual investment Allowance
If you are self-employed and have bought work equipment such as a computer, printer or phone you can’t necessarily claim these as expenses. But you can claim tax relief on them through the Annual Investment Allowance (AIA). This allows up to £200,000 of investment in fixed assets which can be deducted from your tax bill. For the most part, AIA covers the cost of anything you need to carry out your business.

3. Property
You must declare income earned from property if you are a buy-to-let investor. But maintenance expenses, can be applied to the income to reduce your tax bill. If you use a letting agent to manage it for you, their fees count as an expense against that income.

4. Capital Gains Tax
Any significant gains from the sale of stocks, shares, property or any part of your business need to be declared. You have an allowance of £11,700 before tax is due on any capital gains you made.

5. Gift Aid Tax Relief
Charitable donations are taken into account and deducted from your tax liability. It’s possible to make a donation now and carry it back into the previous year. Gift Aid donations give you as much as 60 per cent tax relief.

6. Student Loans
If you have a student loan you must give details in the final section of the form. You must declare it, but there’s no tax relief on loan payments.

And that’s it. You then need to submit the form to HMRC – and make sure you hit the submit button! There’s lots of online help, including YouTube films and guides.

HMRC wants you to get your return right, first time and by January 31 – just don’t leave it too late!

Click here to watch a video explainer 

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