If you are a locum GP, you do remember the last time you were scrambling to get your paperwork together to file the dreaded Self Assessment tax return on time. As a locum GP, the frantic moments of searching for government ID references and your bank information is still fresh in my memory. With experience, I have come up with these top 10 tips on filing tax returns for locums to make the entire process easier..
1. Keep your Paperwork in Order
You will need to keep all your bank account records and the complete list of your expenses handy when filing for tax returns. You’ll also have to look at your bank statements and make sure they are up-to-date. You’ll have to track how much interest you have acquired over the past tax year.
You can expect to find heaps of paperwork, statements, and receipts to sift through to file your tax returns. However, you might find it helpful to use any online organizing tools to streamline the entire filing process.
2. Look online for query resolution
Your instincts will tell you to grab the phone and call the HMRC helpline should you have any doubts regarding tax filing. However, I suggest you restrain yourself from doing so since call waiting times on the HMRC helpline can be really long. Instead, I suggest you look up your queries on government help sheets and guidance notes.
You can also try using Twitter to get help. Although HMRC can’t give you specific information about individuals, they can still provide general help. Never give out personal information on Twitter, even if it’s for tax filing purposes only.
In case you need to ask your questions to someone, you can reach out to the self-assessment helpline at 020 3500 2646.
3. Get your access codes ready
If you have already filed the tax returns using the Self Assessment service earlier, you would’ve received a Government Gateway user ID number. You’ll have received this number in the post the first time you filed your returns. You should fish out this number to log in to your HMRC online account.
If you are filing for tax returns for the first time, you’ll need your Unique Taxpayer Reference or UTR number. You can find this number in the correspondence you’ve received from HMRC. Using this number, you will be able to create a Government Gateway account. The activation codes will be sent to you in the post, which you will receive mostly in 7 days.
In case you’ve misplaced your ID number, you can get help to receive new ones from the Government self-assessment online services helpdesk site.
4. Make sure your Finances match up
First things first – having a separate bank account for your self-employed locum work will help. In case you don’t already have one, I would suggest you create one immediately.
It would help if you always cross-referenced your expenses and income before filing for tax returns. Make sure you were paid for each locum session you have worked, keep track of the mileage you have collected over the past tax year, keep a record of the pension payments and the expenses you have made.
Additionally, make sure your bank statement reflects the actual payments you have received for the invoices you’ve issued. And also, your receipts should match the payments debited from your account.
5. Keep in mind that pension is not taxed
You receive tax relief on pension contributions, and you should make sure you reflect the pension information on your tax form. You can claim additional tax relief on your self-assessment tax form – 20% more if you come under a higher rate taxpayer and another 25% if you come under the additional rate taxpayer.
6. Claim your Expenses
To know your taxable profit, you have to deduct your business expenses from the income you receive. You should know which expenses come under the allowable expenses category not to pay more than the amount you absolutely have to.
The allowable expenses you can deduct from your income are mileage, equipment costs, travel expenditure, office expenses, and indemnity costs. To know more details about the entire list of allowable expenses, you can look at the government website’s self-employed expenses page. In case you have done some work from your home, you can reduce a particular amount from your house utility bills.
7. Make Payments
The next step is paying your tax amount before the deadline. The last date for filing tax returns and paying the tax bill is 31st January. Although this is the last date, it is always better to transfer the tax amount a few days before the deadline to process the payment sooner.
8. Always file on time
Always pay on time so that you can avoid unnecessary penalties and extra interest. If you are late in filing the self-assessment form, an immediate fine of £100 will be levied. And the penalties will keep on adding up until you file your returns. In case there is a delay in paying your tax bill, then interest on the outstanding bill amount will be charged. If you think you might not be able to pay your tax amount by any chance, you can contact HMRC to help you pay in easy instalments or extend your deadline.
9. Be ready for the next time
Being prepared for tax filing next year is the best thing you can do to yourself. You’ll have to start putting your papers in order so that the actual filing process doesn’t stress you out. Filing tax returns becomes more manageable if you simplify your record keeping, use locum online digital tools to help organize, and create a separate bank account for your self-employed locum GP purposes.
10. Get Help from Specialized Medical Accountant
If you still think filing tax returns is too cumbersome, you can seek the help of a specialised medical accountant. They’ll not only be able to help with the actual filing but also suggest ideas on saving your tax money. Remember that the accountant fees are also tax-deductible.
As a locum, I have always found that handling the business side of being self-employed was way more challenging than the actual work itself. Tax rules can be complicated and confusing. That is why these 10 tips based on my experience will ensure tax filing is as hassle-free as possible.