How to prepare for Self Assessment tax returns
The truth is filing tax returns can be overwhelming, even for seasoned accountants. We do not blame you if you are feeling a little lost and/or frustrated already with the looming paperwork. To ease your pain, we have put together a handy guide on some topical tax issues that will be relevant for January 2023 and help you with the Self Assessment tax return preparation:
1. Cryptoassets and HMRC
As more and more people trade on digital exchanges and include cryptocurrency in their asset portfolios, HMRC is issuing guidelines on how to treat decentralised finance assets, especially with regard to staking and lending where there would have been a tax due on the gain amount if it were a regular asset. If you are trading in cryptocurrency, you may need to find a specialist accountant who can provide Self Assessment tax return help and explain how this works and develop a budget with you for any extra amounts you may owe.
2. Jointly held investments
- Income from shares in a close company
- Income that neither party holds claim to
- Income from letting furnished holiday residences
- Income that is treated as the property of a third party for tax purposes
3. Time To Pay arrangements
- Their tax liability is under £30,000
- They have filed their 2021/22 returns
- They are within 60 days of the tax deadline
- They plan to finish payment within the next 12 months
4. New MTD for VAT penalty regime
5. Reasonable excuse for penalties
There is no clear definition by the law of what constitutes a ‘reasonable excuse’ – it is considered on a case-by-case basis. What is important to remember is that once the reasonable excuse ceases, tax penalties will start to kick in unless remedies are made within two weeks after the excuse stops. This means that you have to get your taxes filed within 14 days or submit a request for an extension on legitimate grounds. Need Self Assessment tax return help? Contact us.
6. New tax residence indicator tool
The HMRC has set up a Statutory Residence Test to help taxpayers determine their residence status for tax purposes. This includes the automatic overseas test, the automatic UK test and the sufficient ties test. The slight drawback, however, is that you can not view or download a copy of the answers to the questionnaire for reference.
7. Timely Capital Gains Tax (CGT) reporting
All UK residents are required to report and pay CGT on any property sale via the online UK Property Reporting Service. While the deadline for this used to be 30 days after the sale, it has now been pushed to 60 days.
And if the taxpayer pays more capital gains tax than they owe, they need to contact HMRC and request a refund. Call Golding accountants on 01268 330600 if you need help with CGT reporting.