Top tips for online tax returns

16 December 2008

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No one relishes the thought of having to complete their tax returns, especially over the festive period, but if you plan to submit your tax return online you only have until 31 January 2009 . Make sure you meet the deadline to avoid being fined.

Meet the deadline

There are always consequences for not meeting deadlines and the forthcoming one is no exception. There is an automatic £100 fine if you fail to submit your tax return on time. If it is delayed a further six months, you will receive another £100 fine, while a further six months could result in a fine equivalent to the tax due.

Keep proper records

It is imperative that proper records are maintained, as failure to do so can result in a heavy fine. Furthermore, you might, at a later date, be asked to verify the figures in your tax return. It is essential to record all income and expenditure, ensuring next to each entry there is a narrative, date and reference number.

Other records that need to be accurately maintained include:

Pensions and life insurance
Interest and dividends
Employment documents (P45s and P60s)
All sources of income, including land and property
All items of expenditure.

Claim your entitlement

In order to reflect a true and fair view of your tax affairs, all income, allowances and expenses need to be declared. Individuals are often not aware of their entitlements and, as a consequence, do not claim all their expenses. Examples of this include use of your home as an office, capital allowances and mileage allowance. It is equally important to disclose all income, including such elements as goods taken for private use. Should these come to light later, penalties and interest can be imposed by HMRC.

Register in sufficient time

To submit a return online, you will need a unique tax reference (UTR) number. Without this, a return can not be filed. Therefore, regardless of whether you have all the figures and are ready to submit online, you cannot do anything without the UTR. The length of time it takes to get a UTR will vary depending on your circumstances:

If your business has been registered already, you can apply on the phone and the UTR will then be mailed to you by second class post.
If you need to register your business, the same process applies but it can take up to a week.

Don't leave it too late to obtain a UTR. In the run up to a deadline, HMRC will be busy and the process could be delayed.

Seek advice

If you are not sure about any aspect of your tax return, it is important that you seek advice. HMRC offer a tax advice helpline on 0845 60 55 999. You will need your National Insurance number or UTR so it is a good idea to have these to hand. Alternatively, you can seek advice from a qualified accountant.

Choose a package to help you

There are not many packages aimed at individuals; they are often usually available only to tax advisers. However, it is essential when considering a package to take into account the following:

Support - this should be easily accessible and concise
Ease of completion - a system that will tailor the specific sections to your circumstances
Accessibility - able to complete the return around your schedule.

The packages should be supported by an agent, registered with the Inland Revenue, who will have the relevant experience and expertise to ensure correct completion of the return.

Act now

Tax returns may be one of those tasks that is traditionally left to the last minute, but by filing your return as soon as possible it will save you the stress AND costs involved in late or non-submission.

If you haven't submitted already, don't delay. The sooner you get it done, the sooner you can get on with enjoying the festivities.

For more information on self-assessment, visit the Business Link website.

About the author

The author of this article is Paul Baron FCCA, Managing Director of AAS Group, AAS Group specialises in friendly, cost-effective online submission systems, with built-in cashbooks for ease of preparation of your accounts. For more information visit www.online-taxreturn.com.