Every year, the approaching tax return season instils a sense of anxiety and pressure. It is normal for anybody to become anxious due to the impending deadline, the complicated paperwork, and the constant worry of making mistakes. Nevertheless, handling your returns need not be an overwhelming effort. You can significantly reduce your stress with a few smart strategies and following an organised process.

In this blog, we will explore quick wins to uncover invaluable insights and practical tips to help you navigate your tax return's intricate realm.

Understanding Your Tax Return

Before we dwell into knowing effective strategies to file your returns, understanding the basics of tax returns is crucial. Individuals in the UK must submit a self-assessment tax return to Her Majesty's Revenue and Customs (HMRC) to disclose their income, profits, and any other financial information. It includes salary income, self-employment income, rental income, and other sources of income.

Not everyone needs to do a self-assessment tax return. For instance, if you are self-employed, make additional income (for example, renting out your property), or make more than a specific amount while claiming child benefits, you must do a self-assessment return.

Also, certain professions need you to do a self-assessment tax return, such as if you are a trustee of a trust or a pension scheme or if your taxable income is over GBP 100,000. However, the above is not a complete list. Hence, double-checking whether you must fill one is essential. 

Effective Strategies for a Stress-Free Tax Return

For many people, tax season can be a stressful time full of uncertainty, paperwork, and the worry of making costly mistakes. However, with the right strategies and insights, you can complete your tax returns quickly and effectively, minimizing stress and guaranteeing compliance with all applicable regulations.

Below is a range of proven strategies and tips to help you tackle your tax return with confidence.

1. Stay Organised Throughout the Year

Maintaining organised financial records throughout the year is the first step to a stress-free tax return. In your tax return, you'll need to include a lot of information, much of which will be apparent information like your name. This entails keeping track of your income and expenditure costs, retaining relevant receipts, and recording all financial dealings.

It's a good idea to look up the relevant information before you start filling it out because it could take some time to gather all the information needed. By consistently doing this, you'll avoid rushing at the last minute to assemble all your paperwork before the filing date.

It is also helpful to have your NI number, Unique Taxpayer Reference (UTR), and P60 at hand.  P60 summarises your earnings and all tax payments you made during the tax year.

2. Use Online Services

Gone are the days of paper tax returns and piles of documentation. HMRC provides a simple online tax return filing platform. Using tax return online services simplifies the procedure and minimises the possibility of errors.

Regardless of your level of tax expertise or familiarity with self-assessment, the HMRC platform ensures you do not miss any important information. It's like having a qualified assistant who will guide you through each process step and prompt you to enter the relevant data precisely and completely.

With a user-friendly interface, even those with little knowledge of tax problems can comfortably use the system. It eliminates guessing, streamlines the entire process, and makes it easier for a wider range of taxpayers to access. Consequently, you can file your tax return without hassle, knowing that you've taken care of everything and significantly limiting the possibility of making expensive errors due to manual computations or forgetting important information.

3. Keep Track of Deadlines

Tax returns carry multiple deadlines. Tax return UK deadlines vary depending on your circumstances. Hence, it's essential to mark significant dates on your calendar. Tax deadline violations can result in fines and unnecessary stress. Be aware of the due dates for filing tax returns electronically and on paper and making any overdue tax payments.

Typically, you get six months after the tax year ends to register. For paper returns, you have until the end of October; for online filing and payments, you have until the end of January the following year. Another payment deadline exists in July for making advance payments on your tax.

So, for tax year 2023/2024, this is

  • Register: 5th October 2023
  • Submit paper return: Midnight 31st October 2023
  • Submit online return: Midnight 31st January 2024
  • Pay the tax you owe: Midnight 31st January 2024
  • Make advance payment for the following tax year bill: Midnight 31st July 2024

4. Understand Your Tax Amount

Paying your tax bill isn't always just about meeting the deadline. Your bill may require multiple payments.

  • Balancing payment: This is the tax you owe for the previous year.
  • Payments on account: Unless you have previously paid 80% of your bill, you will need to make an additional payment for the next year's bill if your bill is greater than GBP 1,000. These payments on account, due by January 31 and July 31, respectively, total half of the tax bill from the previous year. Any unpaid taxes are added to the balancing payment for the next year.

Also, understanding your tax allowances is vital. The UK has several allowances, such as the Personal Allowance, which decides the income you can earn before paying tax. Understanding these allowances will allow you to plan your finances more efficiently and lower your tax liability.

5. Tax Credits and Deductions

Exploring tax credits and deductions can significantly impact your tax return strategy. The UK has various tax relief options, and taking the time to research them may significantly decrease your overall tax obligation.

  • A. Uncover Hidden Savings
  • Start your exploration by scrutinising available tax credits. For instance, the Marriage Allowance is a noteworthy option that can result in significant savings. You can pay less in total taxes by giving your spouse or civil partner a share of your personal allowance.
  • B. Identify Deduction Opportunities
  • Then, pay attention to deductions designed for your particular circumstances. Deductions can include various expenses, from business costs to charitable donations. A thorough analysis and comprehension of these deductions might result in considerable savings.

6. Know the Sections You Need to Fill

Understanding the sections that need your attention can help you clarify a tax return. There are several sections on the tax return form; not all need to be filled out. Knowing exactly what sections apply might make the procedure simpler overall.

  • A. SA100 – The Core Section
  • The core portion, SA100, covers a broad range of financial concepts. Report information like pension contributions, benefits, and dividend and interest income here. Understand this essential component since it is the basis for your tax return.
  • B. SA103 - For the Self-Employed
  • SA103 pertains to self-employed. The income and expenses associated with self-employment are covered in this section. To appropriately determine your tax obligation, it is imperative that accurate reporting be made here.
  • C. SA105 - Property Income
  • For those receiving income from property, SA105 is the designated section. Enter your rental income, expenses, and any other pertinent financial information related to your property here. 
  • D. Capital Gains (SA108)
  • If you have capital gains to report, fill out SA108 with the necessary information. This section deals with gains from assets like investments and property.

7. Don't Procrastinate

Stress-related to tax returns is significantly influenced by procrastination. Don't wait until the last minute to file your tax return. Make time to work on it over the course of the year, or at the very least a few weeks before the due date. This will allow you plenty of time to deal with any unforeseen problems that may come up.

Filling out a tax return is a lengthy process. Giving yourself plenty of time is good because hurrying up might result in mistakes. Before submitting, you'll have the opportunity to double-check that all the information is accurate, so make the most of the chance by carefully checking all the sums.

If you make a mistake on your tax return after clicking "Submit", you still have time to fix it before the next year's filing deadline. Therefore, if the deadline for submitting your application were January 31, 2023, you would need to make the change by January 31, 2024.

8. Seek Professional Advice

You must get expert assistance if your tax situation is complicated or if you have questions about certain deductions or exemptions. Tax experts can offer wise advice and ensure you take full advantage of potential tax savings. Additionally, they can explain any amendments to the tax code that can affect your return.

How Can Unicorn Accountants Help You?

Filing taxes does not have to be an overwhelming process. By being organised, using internet resources, seeking professional accountant services or advice when required, and using the above strategies, you can substantially decrease the stress of filing taxes.

Always remember that quick planning and precise attention to detail are the keys to ensuring a pleasant and trouble-free tax season. With our assistance, you can confidently handle tax season and ensure an effortless process. Don't wait; contact us right now to simplify filing your taxes!