Do late fees even work?
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There are many perks of being freelance. Working in your pyjamas. Not having to contend with office politics. Never missing the postman. However, filing your tax return is definitely not one of them. And, if you’re anything like us, you probably vowed to get going on April 1st and then left it to the last minute. However, don’t despair. Although the deadline is just around the corner, we’ve got you covered with all you need to know about filing your tax return and dealing with last minute dramas.
The latest you can file your tax return (for the year April 2017-April 2018) online is midnight on the 31st January. However, avoiding it until the day itself is not ideal. Not only will HMRC helplines be jammed for hours but those who are registering for the first time will need to allow an extra 20 days to ensure they receive their log-in details and unique tax registration number (UTR).
If it’s late (like a whopping 750,000 businesses were last year) you’ll automatically receive a £100 penalty, which increases after three months. There are some reasons that they could grant you an extension (such as serious illness or death in the family) but, barring extenuating circumstances, you’ll be expected to cough up.
Although it is a bit of a faff, making sure you’ve claimed every expense you can is definitely worthwhile. Here’s a few things to include…
If your previous ‘filing system’ consisted of shoving receipts in your coat pocket, don’t panic: although you don’t need to send proof with your return, you do need a paper trail should you be audited.
Luckily, HMRC accepts ‘reasonable proof’ so bank statements are fine (especially for monthly payments). Also, check your phone: your email is a treasure trove of electronic receipts and some apps (for example the Trainline app) automatically store invoices on them. There’s also likely to be some leeway on the types of items you wouldn’t typically receive a receipt: such as street food abroad or second-hand items. “For cash expenses abroad, you claim expenses with HMRC worldwide subsistence rates” adds Mike.
Those of us who also work part-time, or had tax paid at the source, will need a record of previous earnings. You can find this on your P60 but don’t worry if you can’t locate it: a quick call to HMRC to ask for a statement of earnings will do the trick.
You can reset these online. If you are locked out after too many login attempts, you’ll need to wait two hours until you can access them again.
We hope this guide has helped you feel a bit more confident about filing your taxes this year. And just in case you’ve forgotten it, here’s the HMRC services log-in page so you can get started right away!
If this sounds like you, head over to our Virtual Office and send us your best work via an UnderPinned Portfolio. We want to hear from you!
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