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Your Money > Alice Lilley archive Articles > Step into the...
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By Richard Evans
Flushed by the success of their online self-assessment system, the taxmen have taken another step down the high-tech path: you can now get tips on completing your return from an HM Revenue & Customs video podcast. The podcast (available under the "self-assessment" heading at www.hmrc.gov.uk/podcasts ) offers a step-by-step guide to the Revenue's online tax return service, which more and more taxpayers are using. The online service "is secure, accurate and automatically calculates your tax - you get immediate acknowledgement and faster repayment if we owe you money", according to the Revenue. "Filing online is the fastest and most efficient method of filing a tax return," says a spokesman. "I have heard of customers who filed their return online on a Monday and had a tax refund in their bank accounts three days later." The deadline for filing your return is 31 January, although not everyone has to complete one. "Broadly speaking, the following people need to fill in a tax return: anyone who has been sent one, the self-employed, company directors and those with income or other gains that have not been taxed at source or have been taxed insufficiently," says Mike Warburton, a senior tax partner at Grant Thornton, the accountancy firm. If you are on this list but haven't been sent a hard-copy return, you can file online or ask the Revenue to send you a printed version. In the latter case you will have three months from the date of issue to complete it - although you will pay interest on any tax due from 31 January. If you haven't already registered for online submission there is still time, but you must do so before 22 January, as it may take a week for your "activation" pin number to arrive in the post. You will need your 10-digit "unique taxpayer reference" to apply for this pin. Visit www.hmrc.gov.uk to get started. The key to filling in your return is having the necessary paperwork - such as bank and building society statements, business earnings, expenses, or accounts where appropriate - and working methodically through the form. Although you could enlist a professional such as a tax adviser to fill in the form for you, this shouldn't be necessary unless your affairs are complex, says Mr Warburton. "The Revenue offers help to fill in the forms if you need it. If you are taxed through PAYE and just have a few investments, for example, you shouldn't need to hire a professional," he adds. If you are using a paper return, check that you have all the pages you need by completing Page 2 (you can download any extra pages needed from www.hmrc.gov.uk/sa/forms/content.htm ). You can work your way through the form with the help of the Revenue's guidance notes ( www.hmrc.gov.uk/worksheets/sa150.pdf). "Make sure you understand them and are sure of the figures you want to enter before starting the return," it says. "Check your return once you've finished, make sure you haven't forgotten anything and attach all your supplementary pages. If it is a paper return make sure you sign it and attach all relevant forms." It's also important to put figures, not words, in the necessary boxes. "If you write such things as 'information to follow' or 'see attached accounts' we will not accept your return as complete and will send it back to you," warns the taxman. You won't have this problem if you file online because the software uses your figures to calculate your final tax bill before your eyes and won't allow you to submit an invalid return. And you don't have to complete the online form in one session - you can save the work you have completed and return to it later. However, as the online service will be much in demand in the run-up to the deadline, the Revenue suggests trying to avoid busy periods such as mid-morning and mid-afternoon on weekdays - and the last week of the month entirely if possible. Anyone filing a late return faces an automatic penalty of £100 plus interest on any tax due, which is charged at 7.5 per cent. However, the taxman has promised a sympathetic approach to those affected by the foot and mouth outbreak or floods of last year. "They may have lost records. We want to do everything possible to assist them; they should contact us if they need any help or advice," says the HMRC spokesman. If you find yourself owing more tax than you expected, it may be because your tax code was wrong and your employer deducted too little through the PAYE system. "This is a common problem," says Mr Warburton. "People often don't check their tax codes, which can be wrong as a result of changes in circumstance such as a new job or a period living abroad. This can result in paying too little tax - or too much - through PAYE. "People who don't fill in a tax return may never discover this. Those who overpaid would then never get their money back, while anyone who paid too little tax is still legally liable for it. So it's very important to check your tax code at the beginning of each tax year." If you are due a rebate, the taxman will keep the money on account to offset against your next bill unless you specifically ask for a repayment by ticking a box on the return; alternatively, you can donate it to a charity of your choice - adding a virtuous note to the satisfaction you will feel at having your tax return out of the way for another year.
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