How to manage your finances online and take the stress out of the tax self-assessment deadline
Stress-free self-assessment made easy. for next year at least
How to file your UK tax return online. How to use the HMRC website to submit your tax return.
The 31 January 2014 deadline for online submissions of self assessment is approaching faster than you think. And remember that you can file your tax return any time between the end of the tax year in April and the following January. It's certainly not too late to file your return if you are self employed, you generate income from property or you run a small business. And it isn't difficult - at all. Unless you have particularly complex needs you don't need an accountant, in my experience. But you do need to act sooner rather than later.
Simply head over to the HMRC website and follow the instructions found therein. You'll need a log in and password. Once you have signed up I'd recommend keeping those details handy somewhere. Otherwise every time you come to log in you will have the faff of trying to remember your details.
You'll need your PAYE details if you have them, as well as accounts of money earned and costs incurred. You also need your National Insurance number.
I find that it is easier to work out incomings and outgoings in advance of logging in to HMRC and have them handy on a text document or spreadsheet. If you are an individual filling in a tax return with additional earnings on top of your salary, it is always good advice to keep hold of your P60 and have it at your side, as lots of relevant data is there.
Finally, if you get stuck call up the helpline at 0300 200 3310. In my experience the operatives are really helpful, and they are very much on your side.
There's not much more to add as to the technical effort required in filling in a self-assessment tax return. But business are a little more complex.
There's much more to running the accounts of a small business than simply filling out HMRC's form, of course. So we asked Bobby Chadha, an accountancy expert at financial software maker Intuit. to explore ways of removing the pain of filling out tax submissions this January. Here's what he told us:
How to file UK tax return online
Resolutions, dieting and gym membership define the first weeks of January for many people. However, for ten million of the population, the start of the new year is synonymous with painful hours of sums and old receipts as they rush to meet the 31st January tax self-assessment deadline.
Considering that over 500,000 new businesses will be founded in the UK in 2014, for many business owners 31st January 2015 will be the first time they have filed a self-assessment. It should be an exciting opportunity to reflect on the first year’s successes but the process can become an unnecessary, and costly, headache.
The fact is, it need not be. Gone are the days of shoeboxes crammed with a year’s worth of receipts that then have to be waded through with a keen eye. The fear that important receipts have been lost over the course of the year; gathering up all your various accounts into one place; working out where all your records are late into the night – this is all fast becoming a thing of the past. We are now in an era of online accounting software – the anaesthetic to the traditional tax return pain.
Simply put, online accounting software takes the place of the shoebox of old. You can always access it, you can always update it, and you can run reports in real time. As opposed to waiting for pre-arranged monthly meetings with your accountant, you can now
log on and check the latest state of your company’s finances. You suddenly have the ability to find out your financial situation with the click of a button, instead of finding the time to tot up a spreadsheet and make sure that all your sums are correct.
This allows for a much more fluid and reactionary managerial position. Business owners now have the capability to make crucial decisions for their firms, such as hiring new staff or planning for expansion, safe in the knowledge that they have the right financial data at their fingertips. (See all business tech tips and tutorials .)
For any business owner feeling the rush of panic at the moment, the benefits of such a system should be immediately apparent. It may be no surprise that the cloud has so quickly been adopted in the world of financial accounting software. As different features develop and interact, the platform is becoming increasingly powerful.
The most well reported benefit of managing your finances online is that it allows you to keep on top of your records throughout the year. Every single expense – office costs, phone bills, stationery and repair callouts – can be linked to your account. In conjunction with organisation platforms such as Evernote, you can take photos of receipts and save them in an easily accessible place. This means that you can log on and see the most up to date view of your finances straight away, and not scramble to find and add up your expenses all in one go.
With some software, business owners are also given the chance to work in closer collaboration with their accountants. This creates a direct line to those with the specialist knowledge, who can offer advice on any financial situation. Whereas in the past accountants would come into the office once a month at best to check up on a business’s financial health, now they are able to do so on request.
What’s more, all you need is an internet connection to log in to your account. This gives business owners increasing mobility and flexibility. They no longer have to sit in their office to check their accounts. In my experience, this has been one of the greatest attractions for small business owners who have to travel a lot - they can be given a holistic view of all their transactions while on the move. There may be whispered questions and concerns around the security in the cloud, but the majority are excellent. If you do have concerns, I would recommend checking with your provider the level of security they offer.
One particular advantage especially relevant to this time of year surrounds VAT. As an accountant, I know that a common error of those filling out tax returns from a spreadsheet is not remembering to discount VAT on every receipt, which causes the inevitable to-ing and fro-ing with HMRC when the return is handed in. In some cases this can lead to missing the deadline and incurring unnecessary fines.
Online financial software, however, will account for your VAT correctly and automatically. At the very least, this streamlines the process of completing forms by doing the sums for you. In the more extreme examples, it can save an immediate £100 fixed penalty from the taxman.
Online financial software is evolving. What is on offer now is the start of a trend in the market that will spread and progress over the coming years at a fast pace. With each iteration will come increasing benefits to business owners and accountants who elect to use the software.
The importance of managing your accounts online at this time of year should be evident. Online financial software frees you from being bound to your accounts and gives you the time to focus on the real thing that matters to any business owner – their company. Visit Business Advisor for more, well, business advice! (For more, see all Finance software reviews .)