28th March 2013
Some simple ideas to prepare for your tax return
The excesses and busy period of Christmas were only just in the rear view mirror when we arrived once again at self-assessment time. Many people think that this brief period offers rich pickings for those in our profession due to the enforced nature of the returns work; but the truth is, if left until January, it is rushed, stressful and actually requires more preparation than those returns completed earlier. I am very sure it’s not all that fun for you either!
So this year as the rush was over, I wondered what could be done to avoid this annual hiatus. Simply demanding, as others will, that you get your figures to me earlier or ‘aim for October’ is not practical.
So instead I wanted to come up with 5 ideas that will mean you keep on top of the process throughout the year and avoid a last minute dash.
1. Note Down 5 Figures Every Month
Each month write down the following figures:
a. Salary – Gross, tax, bonuses, commission, NI, sickness if employed, if self-employed make a note of your sales and expenses in the month and place them in a file.
b. Dividends – Money received from shares held
c. Tax credits/benefits – Paid directly to you
d. Expenses – Those paid by you in cash or card and update mileage details/costs claimed, print out the electronic copies of receipts from your email while they are still fresh.
e. Additional income – Rents, lump sums, other income, cash receipts
2. Photocopy Useful Documents
Take copies of Payslips, dividend vouchers and letters from HMRC and pop them in a folder with my name on it!
3. April Bank Statement
To avoid having to request paper statements, sit down in April and print/download your statements from 5th April the previous year for 12 months. You will need statements for your own personal account and any joint accounts where you are named.
4. Create a Share Calendar
If you hold shares, make a note of the company name, number of shares held and the value per share at the end of each month.
5. Investment List
Create a list of all the investments or assets you have including ISAs, property, shares etc. Make a note of what you paid for them originally and the cost of any enhancements you’ve made. This is quite a useful exercise, so you can remember exactly what you have! That way you will also have the information to hand when you need it.
Some of these are one-off actions and some occur every month, but if you carry them out at the time, it is far easier for you, will only take around 5 minutes of your time and will avoid the very real risk of submitting a late return by leaving it until the last minute.
Let me know if you need any help!