Making preparations for your self-assessment tax return can be stressful, but it’s important to gather the paperwork together so your accountant can complete your return accurately and on time – particularly with the deadline just around the corner.
We like to be upfront with our clients about exactly what paperwork we need and what we use it for. Here’s a breakdown of what your accountant might need for your self-assessment tax return and why.
Why does my accountant need all this paperwork?
Your accountant needs to have the correct documents on hand so they can accurately report your income and ensure you don’t pay more tax than you need to.
By handing them all the relevant information well ahead of the deadline, you’ll ensure they get your tax right on time, every time. You’ll not only gain peace of mind, but also avoid any penalties for late payments or errors from HMRC.
A professional will be able to use their expertise to reduce your tax liabilities as much as possible while ensuring you stay compliant with ever-changing tax legislation.
If you keep detailed records of all your business expenses over the financial year, your accountant will know exactly what to claim on your tax return.
Providing details of any pension contributions and gifts to charity may also help to reduce your liabilities. Basically, the more paperwork you hand over to your accountant, the higher your potential savings could be.
What paperwork does my accountant need and why?
Before your accountant can get started on your return, you’ll need to provide the following information:
- your unique taxpayer reference (UTR)
- your National Insurance (NI) number
- records showing any untaxed income
- records showing income you have already paid tax on.
This list is by no means exhaustive. Different paperwork is required depending on where your earnings come from, and if you have multiple income sources, you’ll need to provide details of all of them.
Sole traders and partnerships
If you’re self-employed as a sole trader or a partner in a partnership, your accountant will need any information related to the profits and losses your business has made in the accounting period.
You should gather all your business invoices, receipts and bank statements for the financial year together, as well as give details of any allowable expenses.
Once your accountant has all the paperwork they need, they’ll be able to accurately see how much tax you owe, as well as where you can claim tax relief and allowances.
Employees
If you’ve been employed during any part of the year – either through your own limited company or otherwise – you’ll need to provide paperwork related to your salary or dividends.
To do this, you should give your accountant a P45 or P60. This will show your salary, how much tax you’ve already paid and any other deductions. You’ll also need to dig up paperwork related to any benefits in kind you’ve received as an employee.
Landlords
If you own a rental property, you’ll need to keep detailed records of rental income you’ve received over the financial year, including receipts, invoices and bank statements.
You’ll also need to provide details of any expenditure, including mortgage interest, general maintenance costs and insurance. This will help your accountant work out your taxable rental profit and deduct your business expenses.
Other income
Because your self-assessment tax return requires you to report all of your income and expenditure, you’ll need to provide relevant paperwork for any other income or taxable benefits.
This includes pension payments you’ve received, chargeable gains and interest from banks and building societies. The more detail you provide, the easier it will be to get your tax returns done right.
Gathering the paperwork together
While this may sound quite time-consuming, your accountant will be able to help you gather up the right paperwork.
One great way to save time and ensure everything is calculated correctly is through good and regular accounting throughout the year. Your accountant can manage your finances year-round, making it much easier to pull all the relevant information up when self-assessment season hits.
We can handle your self assessment returns and advise you on what you’ll need to keep track of throughout the year. Making your life easier and saving you money is our speciality.
Get in touch with us today to take the worry out of your self-assessment returns.