Don't make an enemy of the taxman!
It is one of my missions to make sure my clients stay best friends with the taxman. But what steps can you take to keep HMRC from knocking on your door?
HMRC raise a lot of their enquiries based on information inconsistencies and abuses of the system. Whilst some enquiries are entirely random and cannot be avoided, taking some sensible steps will help reduce the risk of them taking a look at yours.
Here are some tips:
1. Get your return in on time
Sounds obvious but 958,000 returns did not go in on time last year. Apart from the fine, an automatic £100 waste of money, late returns raise your profile within HMRC’s sophisticated enquiry algorithm.
Online returns must be filed by 31st January and paper returns by 31st October. Please be careful though, if you file a paper return one year your deadline is automatically set for 31st October for the next year. Even if you file an online return before 31st January you are still likely to get a fine.
2. Pay on time
Another obvious one but over a million self-assessment taxpayers fail to do this. There may, of course, be genuine reasons why you cannot pay. If that applies you should contact HMRC first, to inform them and come up with a repayment plan.
3.Register on time
For new self-assessment taxpayers make sure you register as soon as possible. It helps you and it stops HMRC from finding out first.
4. Keep HMRC up to date
If there are any changes to your details or you’re having difficulties, advise HMRC immediately. If post is returned it raises their suspicions, even if nothing at all is wrong.
5. Keep good records
HMRC enquiries can sometimes be as simple as answering just a couple of questions and providing some evidence. Good record keeping enables you to respond quickly and accurately, reducing the risk of a full enquiry being launched.
6. Keep a separate business bank account
I’ve mentioned this in previous blogs. With a separate account HMRC (and you) do not have to wade through all your personal accounts to find and extract what is needed. They prefer it, accountant’s prefer it and it’s easier for you.
7. Use an Accountant
We know what we are doing, and we can free up your time so you can concentrate on your business.
I will make sure your returns are on time, claiming what you can and advise on the payments due. Taking the stress away from you because you’ve got better things to do.
How I can help
I provide a full self-assessment service for business owners and landlords. Plus, for anyone completing their own return I offer a checking service to make sure you are claiming what you can and your return is completed correctly. All aimed at helping you stay best friends with the taxman.
For further information check my taxation page and, in the meantime, download my top 10 tips for self-assessment to help you with your tax.
