Top 5 Tax Return Tips for Early Self Assessment Filers

The 31 January Self Assessment Tax Return deadline is fast approaching. That is why it is time to get organised. Missing it triggers penalties, plus interest on any unpaid taxes. This is a financial burden no one needs, especially in tough economic times.

For individuals and small businesses, preparation is key. This year brings changes, including cryptocurrency reporting and simplified filings for some high earners, making early action even more important.

Experts warn that with many small businesses facing challenges or even closure, avoiding preventable costs like late penalties is vital. Don't let a missed deadline add to the strain. To help you get ahead of the curve, here are practical tips for preparing and filing your tax return early.

1. Assemble All Paperwork First

Filing your tax return is like putting together a puzzle. You need all the right pieces to finish it smoothly. Start by gathering these important documents:

• From your employer - Forms P60 and P11D
• From your bank - Interest certificates
• From pension providers - Pension income statements
• From charities - Proof of Gift Aid donations

Having everything ready in one place will save you the hassle of scrambling for details at the last minute and make the whole process much easier.

2. Double-Check the Tax Year

Your tax return should match the financial year that ended on 5 April 2024. Using outdated documents like an old P60 can lead to mistakes, so double-check your paperwork. If you are self-employed, be sure to report your business profits as that will determine your tax bill.

This year is a bit different due to the basis period reform. If your accounts don't align with 31 March, 5 April, or nearby dates, you will need to report two sets of figures: income and expenses up to 5 April 2024, and for the accounting year that ended during this tax year.

3. Report Bank Interest Correctly

Make sure to include all bank interest earned during the tax year on your return—except for interest from ISAs, which is tax-free and doesn't need to be reported.

• For joint accounts - Only report your share of the interest
• For business accounts - Include the interest unless your business is a limited company. If it is, the company should report the interest on its tax return instead

4. Understand the Marriage Allowance

If your income is below £12,570—the current personal allowance—you are a non-taxpayer. As a non-taxpayer, you can transfer up to 10% of your unused personal allowance to a spouse or partner who pays tax at the basic (20%) rate. This can save you both hundreds of pounds in tax.

Here is how it works:

• Non-taxpayer - You transfer the allowance
• Taxpayer - You receive the allowance

Be sure to apply this correctly to avoid delays or errors in processing.

5. Don't Procrastinate

Waiting until the last minute to file your tax return might seem tempting, but it boosts the chance of mistakes. Also, HMRC's online systems often get overwhelmed near the deadline, leading to frustrating delays.

Filing early has its perks:

• You can fix any errors or paperwork issues without the stress of a ticking clock
• You'll have time to double-check what needs to be included

Save yourself the hassle and get it done early.

Conclusion

Filing your Self Assessment Tax Return might not be the most exciting task, but it's important. Starting early helps you avoid last-minute stress, steer clear of penalties and gives you time to explore tax-saving options like the marriage allowance or business deductions.

A little effort now can save you money—and a lot of hassle—when the New Year rolls around.