Pour yourself a drink of something fortifying
- Some basic guidelines for getting your tax return done on time and with the minimum of stress.
Filling in a tax return falls somewhere between punching yourself in the face and unblocking a drain with your bare tongue on most people’s lists of fun things to do.
The tax people may try their hardest to dress the whole thing up in informal language and shiny forms, but it’s all too tempting to ignore the brown envelopes stuffed with forms of tedium. But just because filling out a tax return isn’t much fun, it doesn’t mean it’s not worth doing. You never know – you might find you’re due a refund on overpaid tax. And if you don’t return the forms, you could get fines and penalties, or getting stung with an unexpected tax bill plus interest a few years down the line.
What makes up your tax return?
Everybody fills in the first 10 pages of a tax return (including two pages for notes), but following that are pages to fill in about Employment, Share Schemes, Self-employment, Partnership, Land and Property, Foreign, Trusts, Capital Gains, Non-residence, Pensions and Other UK Income.
How to do your tax return:
Step 1: Get organised. Gather together all the documents you need before you begin. If you are an employee you will need your P60 (or payslips), you may need bank statements, dividend vouchers, interest statements or tax deduction certificates, trust vouchers. - Do not send these with your tax return - keep them safe. If there is something you need to send, make a photocopy and keep the original document.
Step 2: Check you have the right forms.
The standard tax return papers are 10 pages long, but also included are extra pages for other types of income and gains such as employment income, self-employment income and capital gains.
- Ignore those that don't apply to your circumstances.
Step 3: Know your deadlines.
Ah yes, we all love them. Deadlines - ugh!
The tax year starts on April 6 and lasts until April 5 the following year. In April you will receive your tax return papers. There’s an earlier deadline if you want HMRC to calculate how much tax you have to pay. Of course, it doesn’t hurt to get started earlier – returns can be done as soon as the tax year has finished. Get in quick – like buying Christmas cards in January. - If you are mailing your completed papers back, your deadline is October 31.
- If you are completing your tax return online, you have until January 31 the following year.
- Any tax owing must be paid by January 31.
Step 4: Wrong information.
If you find you have made a mistake, any details have been changed, or HMRC has made an arithmetic mistake - because mistakes can happen - let them know as soon as possible. You can only be penalised if your return is incorrect through fraud or negligence - in other words, if you fobbed the figures on purpose. You can be criminally convicted if you try to cheat the tax system. Step 5: Tips and tricks. Jane Moore, from the Institute of Chartered Accountants, has a few ideas to help you along the way: - Make sure you SIGN your tax return on the tenth page!
- If you want to complete your tax return online for the end of January 31, you need to register online to use the sevice, so you must do this as soon as possible here. Allow a week to receive your password from HMRC via post.
- If you want to complete your tax return in hard copy, make sure you have all the pages you need. If you are missing any, you can have the tax office send them out, or just download them from their website here.
- Only fill in the boxes that apply, don't write 'nil' or '0'. If they don't apply, leave them blank.
- You don't have to send any of your records/papers with the tax return, but you must keep them for two years after the end of the tax year. For some income, like letting out your property, you have to keep the records for at least six years.
- Make sure you claim any reliefs under the supplementary pages. For example, you can get tax relief on gift aid donations.
- Don't be put off by claiming if you don't have exact amounts. You can give estimates based on what you think you spend, or use receipts from half of the year to calculate the whole year's estimates. For example, if you buy stationery every month and believe you spend about £20 on it, that would be reasonable - anything outrageous may be investigated by the tax office.
- If you are waiting for information, such as a final amount on how much your shares are worth, you can put your tax return in on a provisional basis including a note that says "this is the latest information, I will send the final figures through when I can".
- And last of all, the extra two pages are there for notes. If anything new and varied from your last tax return has happened, explain it in your notes. HMRC uses risk assessment software to see who they should investigate, so if your income was half of that the year before, just explain it in a note and they may be satisfied.
Step 6: Completion of your tax return.
Finished filling it in? Have you included all the relevant paperwork? Great - send it off and wait for it to be processed to see if you owe money or are owed money.
Now you can sit back, relax, and enjoy a cuppa knowing your tax return is done and out of the way for this year.
OR
If it's just too darn difficult and you feel like throwing your hands in the air and screaming at the top of your lungs like a looney, get a professional to help you out.
The Chartered Institute of Accountants (England and Wales) and Chartered Institute of Accountants of Scotland have online directories of certified number-crunchers. Look for someone who specialises in your area - if, for example, you're a freelancer, you need an accountant who specialises in advises freelancers. Ask around for recommendations - particularly those working in the same kind of industry as you.
If you're stuck, and just need a helping hand:
- There’s plenty of information on what to do. For help and advice on filling in a self assessment tax return, call HMRC's Self Assessment Helpline number on 0845 900 444. It's even open on weekends and bank holidays. They also provide general advice for self assessment.
- Check out the HMRC's guide to filling in your tax return here for more information. It goes through the questions step-by-step.
- Do the return online if you can. If you’re a whiz on the internet you could find it easier and they also give you some extra time to do it. No hassle with paperwork and no danger of it getting ‘lost in the post’. Check out the HMRC website for information on how to do it.
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