But thinking about it now will help to avoid stress later.
Athough the deadline for paper copies is in October, self-assessment tax returns must be filed online by 31 January 2013 or penalties will be incurred. Many see the tax return as a stressful chore and put it off for as long as possible. Saving it all until the last weekend will just cause more problems. Set yourself a series of small tasks instead of aiming to do the whole thing in one go. The busiest day for online returns was 31 January, when HMRC received nearly 445,000 returns. Apparently the ‘rush hour’ occurred between 4pm and 5pm on 31 January, when 37,460 returns (ten a second) were received by HMRC. To make sure that you are not one of those hurriedly trying to submit here are some practical tips.
Not everyone has to do a self assessment tax return, but if HMRC has sent you one, or has sent you a notice to file, you must make a return. Even if you haven’t been asked for one, you may still need to file a tax return if you had a new source of income or capital gains in 2011/12 on which you need to pay tax. If this applies to you, tell HMRC right away.
Spend five minutes registering online if you haven’t already done so. After you have registered, you will be given a User ID, but you will then have to wait around five to seven days for an activation pin to arrive through the post. Get your paperwork together. This will include details about your employment income, such as your P60 and P11D, interest statements from banks and building societies, information on dividends from shares. Overseas income and mistakes on self-employed accounts often result in wrong submissions. Also, remember to claim any deductions such as gift aid donations and pension contributions.
Fill in as much as you can on your return. The information you enter on each screen can be saved as you go along, allowing you to continue later. You can go back and correct figures at any time before you hit the final submit button. If there are significant changes to last year’s return, explain why in the section for further information, as the taxman will want to know. When filing online, you are told instantly how much tax you owe. You will have just over a week to ensure payment reaches HMRC on time. Filing late increases the chances of HMRC taking a closer look at your return, so make sure you file on time. Remember also that not everybody needs to file a self assessment tax return, but if you have been asked by HMRC to do so, you will have to file one.
Those filing after 31 January will incur a fixed £100 penalty regardless of how much tax they owe. If the tax return is over three months late there is now a £10 daily charge which will be added for every further day it isn’t filed. This can mean a further penalty of up to £900. Save a copy of your final return and print a copy of the receipt you receive when you submit it. You must keep records of all information used to complete your tax returns for 5 years and 10 months for those with a business or income from letting out property. There is a maximum penalty of up to £3,000 for each tax year for which records have not been kept.
“These tips are for more straightforward cases but if you do need help, the ICAEW’s Business Advice Service (BAS) offers a free, straightforward discussion with an ICAEW Chartered Accountant. There’s no obligation after your first free session, just practical thinking to help with business and taxation advice.
Find your local ICAEW firm at www.businessadviceservice.com
