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With the festive season taking its toll on everyone’s finances, the UK’s leading chartered accountancy body wants to ensure that taxpayers don’t incur any financial penalties – by making sure their self-assessment form is submitted before the January 31, 2008 deadline. If it is not submitted on time, the ICAEW says taxpayers will be liable to an automatic penalty of £100 as well as accruing interest on any tax owed but not paid by the end of the month deadline. For the last tax year, 1,735,241 automatic late filing penalties notices were issued to those who did not submit their returns by the 31 January, even though 89.2% of self assessment taxpayers filed on time. “Tax payers should make sure they have the most up to date information when doing their tax return form,” said Anita Monteith, of the ICAEW’s Tax Faculty. Below are the institute’s top tips for avoiding hefty penalties by getting in your tax return on time, first time and accurately. 1. Check if you need to actually complete a tax return. Not everyone needs to, so confirm with HM Revenue and Customs (HMRC) before starting work on your return. HMRC also provides a helpful summary on its web site of who does and who does not need to complete a tax return. 2. Make sure you have all the information you need to complete the form. If you don’t, take steps to get hold of it right away. 3. Check the form for errors. A form that is not completed correctly can be rejected by HMRC. It is therefore important to check it carefully. Don’t forget to sign and date the form and make sure you fill in all the boxes which apply to you. 4. Compare the return with the previous year’s form. If there are any significant changes note the explanation for them on the form (there is ‘white space’ at the end of the form where you can make notes). 5. Don’t send in any papers with the tax return. You don’t need to - but records of all information used to complete tax returns must be kept for 22 months after the end of the tax year, or for 5 years and 10 months for those carrying on a business or who have income from letting out property. HMRC might ask for it, and there is a maximum penalty of up to £3,000 for each tax year for which records have not been kept. 6. Do your tax return online rather than complete the paper form. Details are on the HMRC website. If you haven’t done so before you must register to use the online service, and allow time for HMRC to send you the password which you will need. 7. Keep a photocopy of your completed tax return. Sometimes they do get lost along the way and you don’t want to have to do it all again. If you use the online filing service, you should keep a note of the details you have entered. 8. Complete a Form R40, Claim for Repayment if you only want to claim a repayment of tax and haven’t been sent a tax return. 9. Don’t leave it until the last minute. It may take longer to complete than you think. These tips are part of the ICAEW’s aim to help people meet the tax return deadlines, avoid penalties and try to demystify the complex and complicated tax system in the UK. Jan 17, 2008 Email this article Printer friendly page Previous Page
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