If you are a resident of the UK and you have to fill your Income Tax Returns, to be safe from huge penalties on tax and from ending up in jail for not filing taxes. Then here is a list of things you must keep in mind while filling out your self-assessment tax; if you are a first timer then follow this guide and surely you will not only be able to fill the tax, but also save some money on which tax won’t be charged.
So let’s have a look at the 5 best tips to fill self-assessment tax returns easily. You can also read Making Tax Digital Guide from Cooper parry for a full guide on how to fill taxes.
Know if you are Liable to Pay Tax
- If you are self-employed or an independent contractor (to know more about independent contractors read: https://taxfyle.com/blog/independent-contractor-taxes) and made more than £1000 in a year.
- You had an income of £50,000, and you or your partner claimed the child benefit.
- You earned more than £2,500 from renting out property, or from other untaxed income such as tips or commission.
- You earned more than £100,000 in taxable income.
- You earned income from abroad, or lived abroad and had a UK income.
- You need to pay capital gains tax.
- You’re a trustee.
- Your state pension was more than your personal allowance and was your only source of income (unless you started getting your pension on or after 6 April 2016).
- HMRC has told you that you didn’t pay enough tax last year (and you haven’t already paid up through your tax code or voluntary payments).
Register for Self-Assessment Tax Return
Now that you know if you have to pay taxes or not here is what to do next.
Now if you are a first time taxpayer, you need to register yourself on Gov.Uk as self-employed or non- self-employed. After filling that, you will get your Unique Taxpayer Reference (UTR) from which you have to set up the payment gateway.
Saving Tax by Lending money to Spouse
If you are married and you made up to £4500000 or less in a year and your spouse made somewhere close to £10000, then according to the marriage allowance, you can send them up to £1150 and save up to £230 on that.
Saving Money by Claiming for Expenses
You can even claim for the expenses that you made in a financial year and hence save money on taxes. For example if you have taken subscription of some online assets then you can claim it. Also you can make a claim if you have made some clothes that represent your work or even for the fuel that you consume while coming for work.
Filing Tax before Due Date
Make sure that you complete the tax filing one month before the due date, because sometimes it takes time for the UTR or the activation code for setting payment gateway to arrive. So to be safe from paying penalties on tax, we must pay taxes before the due date arrives.