It’s that time of year again! It’s time to think about your Personal Tax Return, what we need, why we need it and why sooner is better than later for everyone! Watch this to find out more!

Transcript:

Hi and welcome to another episode of BaranovTV, designed to demystify the world of accounts and tax and to help your business grow.

We’re talking about tax today! We’ve just hit the 5th of April which is the end of the financial year. It’s time once again to start to think about personal tax and your personal tax return or self assessment form.

Now I know that for a lot of people, it’s not the time of year that you normally think about these sorts of things. It tends to be later, but there’s some real benefits to getting that done:

1. If you’re due a tax refund, it means that you’re more likely to get the money into your account, rather than having it sitting in the Revenue’s. I know which account I’d prefer my money to be sitting in!
2. You also have the opportunity to know what you’re going to pay if you’ve got a resulting tax liability. You have more opportunity to find those funds over the next months, rather than having a really short window if you leave your Return until later.
3. It means that you may be able to adjust the July payment on account. If your income has reduced over the last 12 months, that payment on account may be set too high. If we do your tax return earlier that may come down.
4. It means that you’re less likely to file your paperwork away ‘somewhere safe’ and have to find it all again later.
5. You’ve got less chance to forget what’s gone on. If we ask questions, about what happened to a Capital Gain for example, in the Autumn, it may be a little bit more foggy in your mind as to what the details of that situation were.
6. If you get your Return information to us sooner, it means that we have more chance, to consider the best opportunities for you. In December or to January, it becomes much more of a sausage machine and they just need to get done. We don’t have as many tax returns these days, not like in the last business so we can give careful consideration, more often than not, but it just means that we’ve got more capacity and more time to give the proper consideration to your affairs. We don’t have a team. It is just Chris and I so we really need your paperwork as soon as possible, definitely by the 31st of July because we don’t have team to delegate to. The bigger firms will be able to give tax return information to anyone in the team who may not know you, may not know your affairs and therefore may not be able to draw on that knowledge and experience. They do have a team to pass stuff out to though, but we don’t! From our point of view, it’s really worthwhile and we’d be very grateful to get your information as soon as possible.
7. Finally the biggest benefit is you avoid the stress, the hassle and the guilt factor and the risk of any penalties by getting that information to us sooner rather than later!

So what information should be in a Personal Tax Return?

Your Personal Tax return needs to include details of any worldwide income that you’ve received in the year ending the 5th of April, 2019.

Income from Employments – This includes any self employment that you may have. In which case, we may need to do soul trade accounts for you so we’ll need details of all of the income and expenditure through your soul trade.

Income from a Business Partnership – That information will come from the partnership accounts which feeds into the partnership tax return, into your partnership pages and then into your personal tax return. There is quite a process if you’re involved in a business partnership!

Capital gains – If you’ve sold of any assets so shares, a second house, or your principal private residence, we will need details of all of those. The details we need will include the original purchase price and the date of the original purchase. We need details of any enhancement costs. If you put an extension on, we’ll need to know when that was and what costs were that associated with it. We’ll need details of any associated costs relating to any of those capital gains transactions, so broker’s fees if you sold shares, estate agent’s fees or solicitor’s fees if you sold a property.

Pensions – We’ll need details from your P60 and if you’re the recipient of a state pension, the details from your annual statement. Because the amount will change, normally four weeks into the year, we need to see that statement to know the amounts that you received in the year.

Property – Property could be furnished or unfurnished lets, or a holiday let. In each case we need to know the gross amounts of any income that you may have received, before any deductions for agent’s fees.

We’ll need to know the details of any expenses incurred on the property or on loans used either to purchase the property or secured against it and any refurbishment costs. Refurbishment costs are dealt with in different ways depending on what they are, but make sure that you include all of them then we can check and make sure that everything that can be included is included. We’ll let you know which ones can’t, but it would be going into too much detail to try and cover all of that off now.

Interest – These days interest is usually paid gross but we need to know how much interest you’ve received and whether those accounts are held individually or whether they’re held jointly.

Income from trusts – If you receive income from a trust, you’ll receive a form R185 that certifies how much income has come to you from that trust.

Gift Aid Donations – We need to know if you’ve made any Gift Aid charitable donations where you’ve signed to certify that you’re a UK taxpayer.

Personal Pensions – We also need to know about any personal pension contributions made because those extend your basic rate tax band.

Income from a Company – There’s a lot there and the thing that I’ve not really included is any income from the company! That can take longer to come through because it’s going to depend on when the company accounts are done.

Should you hold back your personal tax return information for the company information?

Our answer would always be ‘No, please don’t!’

We can start the work on your personal tax information before the company information is sorted and just slot that in later on. Please send us your personal information first and then we’ll sort out the company information later.

How should you collate all the information for your personal tax return?

Well, we don’t actually need all of the paperwork. You need to be sure that you have the paperwork that supports the figures that you give to us, should the Revenue come asking any questions later on. If we quote a figure on your personal tax return that you give us, you need to be able to substantiate that.

If you’d prefer to send us all the paperwork, that’s absolutely fine. If you’d prefer to collate everything electronically, that’s fine too. If you want to send us the paper, I would suggest pop it all into an envelope. Have an envelope on the side, or on your desk and as everything arrives, slot that in there and then collate it and send it to us.

How do you know what to watch out for?

Use last year’s personal tax return as a prompt. It will remind you of the different savings accounts you have. It will remind you of the property details that you provided to us. So use it as a prompt but also remember to add any other new sources of income from the lat 12 months.

Collect everything together either electronically or physically and then let us have that. Ideally please use the document transfer system in the client hub on the website. It’s going to be sensitive data that you’re sending us, and will have lots of your personal details on. This will keep it secure.

The last thing to remember is that you MUST retain all your information for six full tax years after the filing deadline of the 31st of January 2020.

The Revenue can open an enquiry and they can go back up to six years, so you must have those records, those records and that information.

As ever, if you’re unsure and you have any questions about your Personal Tax Return, do please get in touch. This is already a long video and I can’t really go into any more detail but if you’ve got a specific question, please get in touch with us.

I’ll leave it at that and I’ll see you all very soon.

(You might also want to have a look at this post, which is similar but slightly updated.)