A 10 step Self Assessment Tax Return Guide

Every January, almost 12 million self-employed individuals (or a fifth of the UK population) have to fill in a Self Assessment tax return, which is a notoriously stressful and generally negative experience. As a result, many dread filing their return and put it off until the last minute. This can lead to mistakes and fines for many people.

QuickBooks wants to reframe the Self Assessment process into one which is more mindful, encouraging people to see it as a way of taking stock of their progress and achievements as a business owner.

We are inviting sole traders to conduct their Self Assessment mindfully and see it as a way of assessing the progress and achievements of the last year.

Wherever we are from, wherever we are now, and wherever we are heading to – at some point or other – most of us will feel stressed about money.

For millions of us in the UK, filling in our Self Assessment tax return brings about an annual dose of dread. Even after a break over Christmas (if you were lucky) many of us are still hungover from the previous year, making it even harder to summon the motivation to get it done.

Added to this is the complexity of navigating Self Assessment while taking into account Self-Employed Income Support Scheme grants, potentially deferred payments, fear of getting it wrong, anxiety about the final amount and, of course, a steady undercurrent of financial stress.

For whatever the reason, the pressure that comes with financial stress can be destabilising – impacting all areas of our lives including our sleep, our relationships, our work, our creativity and our mental and physical health. It seeps into every area of our life, making it hard to stay grounded, stay focused and think clearly.

A very human but incredibly unhelpful response to all of this is to bury our head in the sand and wish that it would all blow over. As human beings, when things get overwhelming, we retreat into avoidance - especially when it comes to our finances.

It doesn't have to be this way. Our ten step Self Assessment tax return guide will help you approach Self Assessment mindfully by staring it right in the eye, staying present, and dealing with it while engaging in mental maintenance.

Mental maintenance is not going to relinquish the responsibility of doing your Self Assessment, or dissolve your stress, but it can bring about awareness and proper self-care that will ease the strain.

Here are ten fantastic Self Assessment tips and tricks to help prepare you to complete your tax return:

About the Author:

Jodie is a Therapist with over 15 years experience in the field and a Tavistock trained executive coach.

Jodie is also the Founder of Self Space, a contemporary mental health service offering a good conversation with a qualified person. They provide flexible, forward-thinking therapy for some of the most progressive global companies from a broad range of creative and corporate industries, including tech, finance, advertising, marketing, hospitality and fashion.

www.theselfspace.com | hey@theselfspace.com

Step 1: Check your balance

First on our list of self assessment tips is to breathe deeply, step back and check-in with yourself. You should do this before you look at your balance, your invoices or any of your other paperwork. Check-in with your own sense balance and ground yourself. 

Your anxiety might be running high right now. Anxiety shows up in restlessness, feeling constantly "on edge”, difficulty concentrating and irritability. Dizziness, tiredness, a noticeably strong, fast or irregular heartbeat, shortness of breath, tension in our muscles. On the low end of the scale, there is uneasiness, at the higher end lies paralysing terror. In between: fear, agitation, withdrawal, dread, and panic. Where are you at?

Wherever you are on this scale, our breath can keep you calm and ease the tension.

Start by taking a moment to sit comfortably, you don't have to be fully upright but at least sat in a position which will allow you to find that balance of focus relaxation, sense of ease in both the body and in the mind, and as you sit there just take a couple of nice big deep cleansing breaths, breathing in through the nose and out through the mouth. As you breathe in through the nose, sense taking in fresh air, the lungs expanding, the body expanding as you breathe out, a sense of letting go of whatever has been going on for you today, feeling the muscles in the body soften as the body exhales just a couple more times, taking deep breaths in through the nose and out through the mouth. Relax your jaw. Unclench your fists and unknit your brow.

Moving into a deeper relaxing breath, breathe deeply, expanding your belly, in for 4 and out for 6. Inhale: 1.... 2 .... 3.... 4.... [hold] Exhale: 1.... 2 .... 3.... 4.... 5.... 6.... . In for 4 and out for 6 seconds. Repeat this for 5 minutes or more.

We can't breathe our problems away, but this certainly helps us to operate from a more rational state. This exercise connects us with our parasympathetic nervous system (sometimes called the rest and digest system, it conserves energy as it slows the heart rate and relaxes muscles). From this relaxed state, we can control anxiety and not have it control us. It helps us feel relaxed and restored, feel more empowered to take control of our own emotions and how we react. It will send signals to your brain and body, communicating that we are safe and able to function. Importantly, it can help shift our perspective when preparing for our Self Assessment.

Ask yourself, what would happen if things went well? Think about how you will feel when it’s done.

Step 2: Now is the right time

Try not to get caught up on what you “should have done” because that can increase anxiety, and will demotivate you from acting on what we need to get done.

It is understandable to feel a level of dread when we are approaching a Self Assessment tax return. Take a moment to remind yourself of previous times when you started off unsure and anxious and you got it done.

Some of us have developed a negative association with filing taxes. As a result of this, when the topic arises we will start avoiding what needs to be done for as long as possible. Avoid avoidance. Procrastination leads to heightened and delayed anxiety. However, with most fears, the anticipation is often worse than the actual thing.

In understanding this, Cognitive Behavioural Therapists often refer to the Habituation Curve.

In other words: feel the anxiety, feel the fear, and do it anyway. Firstly, it won’t be as bad as you think and secondly, by facing it now and getting it done - next time you do it, it will not feel as overwhelming or anxiety provoking.

Step 3: Lean into good stress and away from bad stress

There are two major types of stress: stress that’s beneficial and motivating — good stress — and stress that causes overwhelm and leads to burnout — bad stress.

Stress is a burst of energy that basically advises us on what to do. In small doses, stress has lots of advantages. Stress can help us meet daily challenges, it motivates us to reach our goals and it can help us accomplish tasks more efficiently. It can even boost memory. This is the stress that is important to maintain. This is the stress that will get your Self Assessment done in time and with efficiency.

We can maintain this stress through radical self-compassion and holding a routine of self-care: you know, the stuff we know that helps but gets thrown out of the window when things go south. Have you had enough water today? How was your sleep? Have you had good food? Have you been outside and stretched? Have you been in contact with those you love?

Stress is an inevitable part of life and is key for survival, but too much stress can be detrimental. Emotional stress that stays around for weeks or months can weaken the immune system and cause fatigue, anxiety and overwhelm. With bad stress its impact is so present in our lives we don't notice it. For bad stress, watch out for: an inability to concentrate or complete tasks/ getting ill more often with colds/ body aches/ headaches/ irritability/ trouble sleeping or staying awake/ changes in appetite/ more angry or anxious than usual.

Step 4: Organisation is your friend

You might be reading this Self Assessment tax return guide after maintaining careful financial records throughout the year and being aware of what's coming in and what's going out, keeping anxiety to a minimum. Rather than taking your first look at these records just before the end of January, you might have dedicated a time at the end of each month to review your income for that month and your spending.

If this sounds like you, well done. You’re in the top percentile for financial- organisational skills.

If this doesn’t sound like you, don’t worry. Join the club, you’re in the right place.

Now is the time to get organised. A great Self Assessment tip is to focus on your environment: grab a glass of water, put on a candle and put on your favourite tunes. When there is a lot to prepare, we often can’t see the wood for the trees. A relaxing environment and a solid list of things to gather are perfect balms for anxious and stressed minds.

Make sure you have:

• Your government gateway login details and password

• Your 10-digit Unique Taxpayer Reference (UTR)

• Your National Insurance Number

• Details of all your untaxed income from the tax year, including income from self-employment, self-employment grants, dividends and interest on shares

• Records of any expenses relating to self-employment

• Any contributions to charity or pensions which might be eligible for tax relief

• P60 or other records showing how much income you received which you've already paid tax on. You can check that the value already in your return is fully correct.

Step 5: Reflect on the year just gone and celebrate personal triumphs (no matter how small):

Grab a pen and some paper or your journal. Journaling costs nothing to do, and we have everything to gain from it. It reduces stress, improves immune function, keeps our memory sharp, boosts our mood and helps us regulate our emotions.

So, take a moment to look beyond the numbers and notice the names on your invoices, the people. Who have you worked with? Where have you worked? Notice what comes up when you go through name by name, not just thinking but feeling too. What relationships were built and maintained in 2022? Which of them can be developed throughout 2023?

Visual exercise:

Words sometimes are not enough; it can help to visualise.

Turn your page to landscape. First, draw yourself as a shape somewhere on the page. Second, draw the people you encountered in your working life in 2022 as different shapes too. The closer they were to you; draw them closer, the further away; draw them further away. Third, draw your successes somewhere on the page (it might be a business win, a partnership formed, a project completed, a contract maintained and so on). Finally, acknowledge the challenges and your growing edges (what has been difficult? What do you want to refine this year? And so on).

Take stock of this visualisation. Notice and highlight: Where are your successes? Who do you want to bring closer? What relationships need attention? What are you grateful for? What relationships can be further developed in 2023? Who would you add to it? What changes would you make?

Step 6: Timely siestas will help you through

Have you noticed how much care and attention parents of young children put into their child's sleep routines? It is a sweet science and an art. The blackout blinds, the white noise machine, the monitoring of the room temperature, plenty of naps during the day and early nights are a must. Now, they don't do this because they want to be A* parents, they do this because a tired child is an absolute nightmare to look after. Tired children just do not cope. And we, as adults, share in this sensitive experience of a shortfall of sleep.

A lack of sleep results in tiredness > tiredness reduces our capacity to cope with stress and everyday challenges > our self-esteem takes a knock > we carry our worries to our pillows where they are joined by other catastrophising thoughts > which causes a lack of sleep > which causes tiredness and so on. The cycle repeats.

So, approach your sleep like a responsible parent and take from the wisdom of your younger self. Find comfort under the duvet and wrap yourself up like a human burrito - our minds enter into a different rhythm when we are there. We can see things more clearly after a nap or a good night's sleep.

Other less philosophical and more practical tips for sleep hygiene include: sticking to a sleep schedule, avoiding caffeine and nicotine, avoiding alcohol before bed, taking a hot bath before bed and having a dark, cool (in temperature), gadget-free bedroom.

You can’t run on empty. Sleeping well will give you energy needed to get your Self Assessment tax return done.

Step 7: Notice your feelings and don't try and Marie Kondo them - it is okay to feel a lot

Much of what we come into contact within our culture tells us if we are not happy, there is something wrong with us. So many self-help books promote the benefits of positive attitudes, positive thinking, and positive behaviours, labelling sadness, anger, boredom, loneliness and even grief as “problem emotions” that need to be kept at bay and “fixed”.

Normal, natural emotions are too often seen as negative or positive. When challenging emotions leave us feeling heavy or hurt, we tend to race to our emotional exits in pursuit of happiness or relief.

A natural response to painful experiences is to avoid thinking about them, but research tells us that when feelings and emotions are ignored, they amplify. They get stronger.

Felt feelings feel better than repressed ones.

The only way we can change the way we feel is by becoming aware of our inner experience and allowing ourselves to feel (both heavy and light) without judgement and without rushing to our emotional exits.

Reviewing our personal finances ahead of the Self Assessment tax return can be stressful and destabilising. It can bring up sadness, anger, boredom, frustration, feelings of failure, anxiety and low self-worth. These things do not need to be treated with the urgency of a shark attack. Be with them, feel through them, breathe through them, share them and consider what they might be trying to tell you.

Step 8: Emotionally Overdrawn? Treat yourself

When we’re stressed about finances, one of the hardest Self Assessment tips to remember is to look after ourselves. In looking after ourselves, we look after our minds and our bodies. And this is a shortcut to a calm and clear state of mind. So, be your own best pal.

All of us know how to be a great friend to other people, but very often don’t speak as friends to ourselves. If most of us saw how we treat ourselves, we would recognise how cruel and unforgiving we can be. When you find yourself feeling stressed and overwhelmed, ask yourself: “if I wasn’t me, how would I advise me?” and you will have a good answer. Show yourself the care, compassion, acceptance and understanding that you know that others deserve.

Start small by getting outside. Seek out green space. You don’t need to spend hours outdoors or wandering in the wilderness like Bear Grylls. Go for a walk in the park, notice that tree outside and find a place where you can see a horizon. Virtually any form of connection to the natural world (outside of our internal world) heightens our overall well-being. When we extend beyond ourselves and our own needs, worries, regrets or desires for the future, we become less anxious and more present in the moment.

Give yourself a break. Cook your favourite meal. Connect with people that matter.

Step 9: What is your emotional relationship with money, anyway?

Let us spend a moment looking backwards in order to move forwards.

It might sound weird to think about having an ‘emotional relationship’ with something as practical as money - but it is an effective way of understanding thoughts, feelings and behaviours towards our finances.

As emotional beings, how we feel about something tends to define how we interact with them. We project meaning onto money effectively ‘loading’ it with feelings around security, control and independence

There are generally a few ways that we can characterise feelings towards money. Some of us are very cautious: unwilling to spend money on anything unless we absolutely have to, and we squirrel the rest away. Some of us love to spend money and will spend every last penny - even if it would be more sensible to slow down and keep a few quid for the end of the month. Most of us are somewhere in the middle, sometimes spending lots or treating ourselves, other times in a season of saving.

Generally, how our relationship with money has developed can be traced back to our upbringing. What was the story that was told about money in your family? Was it one of caution? One of abundance? One of betrayal or conflict? One of scarcity? Of survival, stability, instability?

We tend to develop our feelings, thoughts and ideas around money from the people we spend most time with growing up, our parents or caregivers.

In some cases, we might mirror our parents or caregivers’ relationship with money. If our parents were overly cautious with money, we might take this as a lesson and do the same thing. However, it can also mean we do the opposite. Sometimes, we might try to provide our own kids, partners, business or ourselves with what we never had. For example, someone who grew up with very little money or with strict parents might spend in a way that allows them an experience that was never had – whether that’s lavish gifting or bold business investments.

In our relationships, we can also ‘act out’ roles, again mirroring the parent-child dynamic with one as ‘provider’ and the other as ‘provided for’. Both roles can have a deeply significant impact on our emotions, feeding into our sense of security.

Money is such a powerful and emotional subject; this is why understanding our emotional relationship with it can be particularly helpful.

It sounds too simple to be beneficial, but a progressive and actionable step when it comes to improving our relationship to our finances, is talking honestly about it. Talk about money: with your partner, colleagues, family and friends. Demystify it. Talk about how you feel about it, what it brings up for you, what it reminds you of, what the story of it was in your family, what it meant for you in the past, what it means for you right now and what it means for you in the future.

Step 10: Give yourself credit & generate interest:

At a time in which the social fabric within culture feels increasingly fragile, there is something incredibly positive and optimistic that can be found in the idea that we each contribute financially to supporting one another and pay towards building something bigger and better than we could by ourselves.

Spend a moment to consider the aspects of our society that your taxes support: the NHS, schools, those most in need and so on. Which are you grateful for? Which would you change? Give yourself credit for your contributions towards supporting these pillars that keep us upright. Give yourself credit for making it through one of the most difficult years to navigate and still being able to contribute.

Generate interest:

What are your intentions and goals for parts of your financial self in the year ahead? Do you want to focus more on mindful spending? Moving forward, do you want to make room to celebrate your monthly achievements?

Maintaining careful financial records throughout the year can make your life easier by clearly showing what’s coming in and what's going out, you'll help to keep anxiety to a minimum. Rather than taking your first look at these records just before the end of January, dedicate a time at the end of each month to review your income for that month and your spending.

Technology can help make your life easier too. Software providers such as QuickBooks can auto-calculate your figures and sort your expenses into categories, providing confidence about how much income tax you owe – all year round. This allows room for mindful spending moving forward and room to celebrate your monthly achievements.

If there is awareness throughout the year, when the time comes to file taxes, everything will be organised, and your work will be simpler to approach. This will lessen the stress and create a sense of control. We may be delicately and cautiously walking / tiptoeing into 2023, trying not to knock anything over, but know that you can be bold and intentional when it comes to your financial and emotional health and with the goals you set.

So finally, take a moment to reflect. On where you’ve been, where you’re at now and where you’re going to.

Consider the skills you’ve developed in your working life to get you where you are now, what are they? What parts of your financial self do you want to take with you throughout this year? What parts of your financial self do you want to leave behind? What lessons have you learned? What does success mean to you now and would it look like at the end of 2023?

We hope this Self Assessment tax return guide has given you lots of Self Assessment tips to take stock of and set you up with some positive goals for the year ahead.

With that in mind, best of luck as you embark on the Self Assessment process and get in touch with your accountant or HMRC if you need technical advice at any point!