Self-Assessment Tax Return: Essential Tips to File Before the 31 January Deadline

Self-Assessment Tax Return: Tips to File Before the 31 January Deadline

With just 30 days remaining until the self-assessment tax return deadline on Friday, 31 January, it’s crucial to get your paperwork in order. Missing the deadline will result in an automatic £100 penalty from HMRC, with additional interest charged on unpaid taxes. Failing to file within three months will increase the penalties further.

Whether you’re an individual taxpayer or running a small business, this year’s tax return brings some new changes, such as reporting cryptocurrency gains and reduced filing requirements for some high earners. Here’s how you can prepare efficiently and ensure you meet the deadline.

Tips to Prepare for Your Self-Assessment Tax Return

1. Gather All the Necessary Paperwork

The first step is to organize all the documents required to complete your tax return. Breaking the task into manageable chunks can make the process less overwhelming. Here’s what you’ll need:

P60 and P11D forms from employers.
Bank interest certificates.
Pension income certificates.
Records of Gift Aid donations made to charity.

Being organized from the start can save time and reduce errors when filling out your tax return.

2. Verify the Correct Tax Year

Ensure that all your documents correspond to the correct tax year, which ended on 5 April 2024.

Using documents from a previous tax year can result in incorrect entries, as tax figures vary annually.
For self-employed individuals, include your business profits on your tax return since these are taxable.

Important for Self-Employed Taxpayers:

The 2023/24 tax year marks a transition year for basis period reform. If your accounting year doesn’t end on 31 March or 5 April, you’ll need to report business income and expenses for your accounting year plus the period up to 5 April 2024.

3. Accurately Report Bank Interest

Include the total interest earned on all bank accounts during the tax year ending 5 April 2024:

For joint accounts, report only your share of the interest.
If you’re self-employed, include bank interest earned by your business unless it’s a limited company (in which case, it’s filed under the company’s tax return).
ISA accounts are tax-free, so leave any interest earned from ISAs out of your tax return.

4. Understand Marriage Allowance

The Marriage Allowance allows certain taxpayers to transfer unused personal allowance to their spouse or partner, potentially reducing the overall tax bill.

If your income is below the personal allowance threshold (£12,570), you are considered a non-taxpayer and can transfer part of it to your partner.
The recipient must pay tax at the basic rate (20%) or, in Scotland, the intermediate rate (21%).

Avoid Common Mistakes:

Marriage allowance transfers can only go from the non-taxpayer to the basic-rate taxpayer—not the other way around.

5. Don’t Wait Until the Last Minute

Procrastinating until late January can lead to unnecessary stress, errors, and potential delays with HMRC’s online filing system, as it often experiences heavy traffic near the deadline. Filing early ensures:

Enough time to double-check your entries.
A smoother filing experience without technical glitches.
Peace of mind knowing your taxes are submitted on time.

Why Early Preparation Matters

Filing your tax return early allows you to:

Avoid penalties: Missing the 31 January deadline incurs fines and interest charges.
Plan payments: Filing early gives you a clear picture of any tax liability, helping you budget effectively.
Reduce errors: You’re less likely to make mistakes when you’re not rushing.

How Khoob Accountancy Can Help

At Khoob Accountancy, we understand that self-assessment can be a daunting process. Our team of experts is here to make it easier by offering professional tax advisory services tailored to individuals, self-employed professionals, and SMEs.

Our services include: