Top tips for completing your tax return
With just two weeks to go until the deadline for submitting self-assessment tax returns online, many of you may be struggling to get the job done.
We have put together a list of helpful tips and advice to help make the task more bearable.
Who does self-assessment apply to?
Self-assessment is not just for self-employed people. If you fall under one of the following categories, you will need to complete a tax return too:
• You are self-employed.
• You are a company director.
• You are a minister of religion.
• You have income from letting any property or land you own.
• You receive other untaxed income, or significant capital gains, and the tax due on it cannot be collected through a PAYE tax code.
• You’re a member of Lloyd’s of London insurance and reinsurance market.
• You receive annual income from a trust or settlement, or any income from the estate of a deceased person, and further tax is due on that income.
• You have taxable foreign income, even if you are claiming that you are not normally resident in the UK.
Remember, you can only apply online if you have already registered. If you haven’t done this yet, you should do it now. It can take up to seven working days for HMRC to send you an activation code by post. The deadline to submit your tax return is the 31 January, so you need to start the application as soon as possible.
Don’t forget to activate your account. Normally you have to have activated the account within 28 days of receiving it; otherwise you have to request another one. In this case, you do not have 28 days.
To sign up click here.
Am I better off completing my tax return online?
There are a number of benefits to completing your return online. The three-month extended deadline aside, submitting it online means you get an automatic tax calculation and faster repayment if the taxman owes you anything.
And as an added bonus, if you have sent it in online before, HMRC fills in all basic details for you into your personalised tax return form. It reacts to your answers and removes all unnecessary sections.
There’s also the relief of getting that reference number once you press submit. This leaves you free from worrying about whether or not your tax return is lost somewhere in the deep depths of snail mail.
Where do I go to complete my tax return?
HMRC has its own online software which allows users to file the main self-assessment tax return (SA100), and a number of supplementary forms including:
• Individual partnership – to report your share of a partnership’s profit or loss;
• Land and property;
• Capital gains;
• Foreign income.
To log-in to HMRC’s online services, click here.
Once you have logged on to your online tax return, there are five steps to follow:
1. Check your personal details are correct and up to date.
2. Tailor the return – choose to fill in all the sections that fit your circumstances; the online application does this for you up to a certain point.
3. Fill in the figures on your return. The online programme includes handy reminders about where you can find the information to fill in the current section (e.g. your P11D, P60 or payslips).
4. Check the return – make sure everything is correct and complete; remember – mistakes will cost you.
5. Submit your return. When you do, you will get an on-screen confirmation and reference number.
The HMRC website has a demonstration of the online tax return filing process which could be handy if you’re new to all this.
What happens if I miss the 31 January deadline?
There aren’t many excuses HMRC will accept for missing the deadline.
One of the most frequent reasons for people missing the deadline is they were waiting for a specific figure. Don’t let this hold you up. The revenue accepts estimated figures that are declared as being so. HMRC will revise them later should they be wrong.
There are a few excuses HMRC will accept for late filing. These include a life-threatening illness or the recent death of a partner. If you miss the deadline and need to appeal, do so as soon as possible.
If your tax affairs are not straightforward or the standard online self-assessment process won’t work for you, you may want to seek the help of a specialist tax adviser to help you fill in the correct forms.
Will I have to pay a penalty for missing the deadline?
Yes. The amount you will have to pay will depend on how late you are.
|Length of delay||Penalty you will have to pay|
|1 day late||A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.|
|3 months late||£10 for each following day – up to a 90 day maximum of £900. This is as well as the fixed penalty above.|
|6 months late||£300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.|
|12 months late|| 300 or 5% of the tax due, whichever is the higher.
In serious cases you may be asked to pay up to 100% of the tax due instead.
These are as well as the penalties above.
What do I need to get started?
• Your P60.
• Details of any pay and taxable expenses and benefits received from your employer.
• Bank and building society statements.
• Cheque and paying-in book stubs.
• Any dividend vouchers you have.
• Your self-employment accounts.
• Documentation about any capital gains that have been realised.
• Information on other income including investments, savings, pensions, property or benefits you receive.
• Paperwork on anything you can claim for, like self-employed expenses or charitable donations.
You are not required to send anything in with the tax return form, but HMRC may ask to see them at a later date. Never send the original document, make a copy and send that.
Remember, it is a legal requirement to for those filling in a tax return to keep their paperwork up to date. You are also required to keep all income related paperwork for up to 22 months after the tax year.