What's Your Self Assessment Personality?
06th February 2017
When it comes to Self Assessment tax returns, there are a few distinct personality types. Some are more likely than others likely to run into trouble when it comes to deadlines and fine details. That means it's worth knowing what your type is.
We're not saying everyone should approach their tax returns the exact same way, of course. However, unless you really are the super-efficient number-cruncher you think you are, you might not want to leave it to the last minute. Here's a run-down of the most common Self Assessment personalities we tend to see at RIFT.
The Deadline Scrambler
Deadline scramblers aren't the most careful record keepers out there, but they usually get there in the end. The problem is, the end comes in a very hard deadline on the 31st of January.
At the last deadline, about 400,000 deadline scramblers mobbed the HMRC phone lines at the very last minute (or at least, on the very last day). The thing is, right at that moment a technical glitch cut many of them off. The taxman's doing his best to make sure no one gets fined for missing the deadline because of the crash. However, it's a situation that people really didn't need to put themselves in.
If you're a deadline scrambler yourself, you've probably already made your mind up a dozen times to start sooner. Remember that life throws out a lot of distracting challenges - particularly toward the end of the year. It's easy to let your paperwork slide around Christmas. Just remember that the taxman's making a list, even if you've forgotten yours - and he always checks it twice...
If you have recently missed a deadline, whatever you do don't ignore it. Get in touch with us right away and we can talk to HMRC and help sort things out for you. The longer you leave it, the more the fines will stack up.
The Paperwork Dodger
Paperwork dodgers never seem to find the time to do their homework. Receipts are dumped in drawers, invoices scattered to the winds and log books used to prop up wonky coffee tables. Even if they muddle through most of the time, paperwork dodgers usually end up end up paying more tax than they need to.
Another worry of not keeping good paperwork is HMRC deciding that someone isn't taking "reasonable care". That's a pretty serious issue right now, with the taxman tripling the number of penalties he's handing out for clumsy paperwork.
Even assuming they don't get in hot water with HMRC, there are good reasons to avoid being a paperwork dodger. Without good records you can't claim tax refunds or get relief on your expenses because you don't have the evidence of what you've spent to show HRMC
Paying too much tax can be almost as painful as getting caught paying too little. Paperwork dodgers run the risk of getting caught out both ways!
Here at RIFT we've got lots of helpful ways to help making keeping your paperwork up to date easier - and making claiming your tax refund at the end of every year really simple. Get in touch and we'll tell you more.
The Early Bird
At the opposite end of the spectrum from the deadline scrambler, we find the early bird. This is the person who always keeps a clean set of up-to-date records. Just as importantly, the early bird also remembers where to find them.
Being an early bird is great for Self Assessment tax returns. You never have to stress out about an upcoming deadline or an HMRC penalty for late filing. You're way ahead of the tax game, and keen to stay there.
To be an early bird takes more than just good time management, though. Hitting your deadlines is always a good thing, but great bookkeeping won't save you if your money management's lacking. Paying tax via Self Assessment means remembering that the money you earn isn't all yours. The taxman may not be taking it "at source" via PAYE, but he's still going to expect you to cough up on demand. While you're sorting through your records each month, try to keep a running tally of your expected tax bill. If you can, sock that money away early, and keep it separate. You'll be glad you did when the taxman sticks his hand out.
You don't need to be some kind of Self Assessment robot to get the balance right on your tax returns. All it takes is a bit of careful planning, some good habits and the right help.
Remember you can always come to RIFT for guidance and practical assistance. We can even take the weight off your shoulders altogether with our Self Assessment filing service.
Whatever personality type you are, we can save you money and keep you in the taxman's good books. Get in touch to find out more.