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Top tips when filing a paper version of the Self Assessment tax return

Every year millions of small business owners opt to fill out a paper Self Assessment tax return rather than an online version.

There are benefits to filing a paper form; if you submit a paper return to HMRC before midnight on the 31 October, the taxman will calculate your tax for you. You’ll then receive a letter telling you what tax you need to pay by the 31 January 2014. If the amount comes to less than £2,000, HMRC can collect the amount owed through your tax code, so there’s no lump sum to pay.

But with the 31 October deadline just days away, those still struggling with their forms are clearly feeling the heat.

If you’re one of them, now is not the time to panic. Yes you probably wish you started it sooner, but don’t beat yourself up. All that matters now is getting it finished on time.

The form can seem long and arduous, but follow these essential tips and you’ll make light work of it.

• Where you do not have the exact figures, use estimates. Ensure figures are as accurate as possible and note on the form that figures are ‘provisional’. Exact figures for your business accounts and costs will be needed at a later stage, but for now providing educated estimates will save vital time.

• If your annual turnover was less than £70,000 in the last tax year you only need to fill out the 'short' form, which is just a few pages long.

• If you have been employed in the past year you should have a P60, but if you don’t your most recent pay slip is likely to contain much of the same information. Bank statements also disclose much of what you need to know, how much you paid in pension contributions, charitable donations, and so on.

• Do not forget to declare the interest you received from your bank. Your September statement will often show how much interest you received over the last year, so that's the most important one to look at. Your bank is generally able to provide this information over the phone.

• Similarly, you must declare dividends received from shares or similar investments. This rule applies whether dividends were received as cash or were reinvested. If you do not have a personalised dividend certificate, the fund manager or company will normally list the dividend paid per share on its website. Multiply that by the current number of shares you own to work out the dividend you received.

• If you receive rent from a property you let out, don’t forget to declare it. Annual income from this should be easy to calculate, and you can claim mortgage interest and a wear and tear allowance against it, as well as any other bills incurred for repairs or maintenance. If you don’t have exact amounts for any of this, put forward an educated estimate and locate the precise details for filing with HMRC at a later date, which is likely to be at their specification.

• Don’t be afraid to pick up the phone. If you cannot find the relevant paper statements or receipts, you may be able to get the information you need over the phone or online.

• Remember to deduct all eligible expenses. HMRC allows you to take into account certain costs, such as student loan repayments and personal pension contributions, when submitting the Self Assessment tax return. Remembering to include these costs as it can make a considerable difference to your tax bill. You can use provisional figures here also, but remember to declare them as such.

Before mailing your completed form, photocopy it in case it gets lost in the post. HMRC won’t acknowledge receipt but should let you know when they’ve processed your form.

For additional help, call the Self Assessment Helpline on 0845 900 0444 (note that they’re only open until 8pm). Phone lines will be very so call sooner rather than later and have your Unique Taxpayer Reference (UTR) number handy.

By John Hoskin, director of CleverAccounts.com

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