Tips For Filing Your Self-assessment Tax Returns Quickly And Easily

Your business may be liable to pay tax on its profits under the Construction Industry Scheme (CIS) if you meet certain criteria. If you’re self-employed, your CIS tax return must be submitted by 31 January following the end of your accounting period if you want to use the safe and easy way to file your self-assessment tax returns with HM Revenue & Customs (HMRC). That way, they can begin processing it straight away, and there won’t be any penalties if it’s filed within this time frame.

Get Organised

The deadline for filing self-assessment tax returns and making payments is 31 January. Being organised in December will help you prepare for this deadline. Begin by gathering together all your paperwork, such as invoices, receipts, bank statements and P60s to work out your taxable income and gross profit from the Construction Industry Scheme (CIS). This will also be useful when you’re filling in form CIS supplementary statement of profits and losses or form CIS annual return of net profits. You should also organise your deductions so that you can work out the amount of tax payable on your profit from the CIS.

If you have made a loss, there will not be any tax payable on the CIS. If you have made a profit, then HMRC expects 25% of it to be paid back through Corporation Tax which would usually come out at 10% with 20% coming back in dividends. If the business has been profitable over the last 12 months and has not been paying Corporation Tax due to previous losses, then it may not need to make a payment now but watch this space. It is always worth getting advice if unsure!

Gather Your Documents

If you’re self-employed, there are a lot of documents that you need to gather before filing your self-assessment tax return. You’ll need to have your P60 and P45, as well as any invoices or receipts that show how much tax has been paid on your behalf. Depending on what you’re claiming as relief, you may also need a certificate of employment or one from HMRC showing the date your company was established.

If you operate under the Construction Industry Scheme (CIS), then this will also be necessary when filing. The CIS is designed for freelancers who carry out construction work and it lets them set off their income against expenditure in order to calculate their taxable profits. It’s worth knowing that, while not all construction workers are eligible for this scheme, if you do qualify, you can deduct up to £1 million per year without having to submit proof.

If you’ve got everything sorted and know what type of documents you’ll need, it’s time to get started with filing your self-assessment tax return online. For most people doing so won’t take long at all — even if they’ve got a relatively complicated financial situation like running two businesses with different accounts — but those who earn over £150k per annum should ensure they’ve got everything ready before starting the process. Doing so will make the task quicker and easier so that it can be completed in just 20 minutes!

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