Keep Hector off your back
A range of computer programs can make tax self-assessment much easier, writes Janet Swift
Saturday 02 August 1997
This is the grim prospect in sight for millions of UK taxpayers who face the introduction of a new tax return form which is linked to a drive to make each of us accept more responsibility for how the form is filled in.
Self assessment, as it is known, shifts responsibility from the Inland Revenue to the taxpayer for calculating the amount of tax due. It also introduces penalties for late or incorrect submission of the return and payment of any tax owed. Taxpayers can either fill in the form without calculating the tax due, in which case the Inland Revenue will do the calculations, or do the whole task themselves.
The deadline for the former option is 30 September, but if doing the calculations yourself, you have until 31 January 1998, the date for final payment of 1996-97 tax, to submit the return. If you miss this date, not only do you face interest charges on any outstanding tax, but also an automatic fixed penalty of pounds 100 for late submission.
If you don't want the services of an accountant or other tax agent, but would like some guidance through an unfamiliar procedure, then help is available by way of several computer programs designed to assist in filling in the form and to complete all the calculations automatically.
The Inland Revenue's own website lets you download a free program, EVR (Electronic Version of the Return), which, once installed, lets you fill in an on-screen return with instant access to the official guidance notes. The program navigates through the form and when you answer "no" to a main question it jumps over all the irrelevant supplementary questions.
It takes care of all the tax calculations and also checks that you have filled in all the requisite information. Once the return is finalised the print-out can be signed and sent to the Revenue in place of the pre- printed version you were originally sent. EVR is limited in scope, catering only for taxpayers whose income comes from employment and who have very straightforward tax situations.
There are several commercial packages that cover a wider group of taxpayers and produce authorised versions of the tax return. One such package, Smart Tax Personal, has a core module, Smart Tax Lite, that is downloadable from the Internet free of charge. In SmartTax Lite, as in EVR, you type information into the form. When you select each box a hint appears above it to indicate what you should enter and there is context-sensitive help, based on the Inland Revenue's guidance notes plus general information on self assessment. Extra modules can be purchased to extend the facilities on offer.
SmartTax, with some of its additional options, is available from Intuit as QuickTax 97, with the advantage of links to Intuit's personal accounts package, Quicken 6. QuickTax has facilities to collate the data needed to fill in a return. For example, the tax return asks for total interest from UK banks, building societies and deposit takers. A worksheet lets you enter all the details and it automatically performs the sums and puts the results in the correct box.
An initial interview is a feature of Easy Tax. This collects details to work out which additional pages have to be included. Easy Tax then provides a list of all the documents and sources you will need to complete and support your tax return. From here on you work on the tax form itself, split into short sections to fit into the screen. Although Easy Tax provides a notepad for text comments, it does not include worksheets where you can collate the details and amounts.
Tax 97 from Europress features a series of wizards to guide you. You fill in a series of forms and the program fills in the return for you. Once you've finished completing your return a Form Reviewer checks that you have filled in all the correct sections. You can then use the Tax Code Checker and Tax Calculator to work out your tax liability while you watch.
TaxCalc, marketed by Which? Software, a division of the Consumers Association, is supplied on CD-Rom and a set of three disks. The CD-Rom version has a very clear introduction booklet that clarifies the penalties that the Inland Revenue can impose. There is easy-to-follow, practical advice throughout the program plus a helpful checklist of documents you need and who to contact to discover any missing information. TaxCalc has an emphasis on saving tax, ensuring that best use is made of all available allowances and reliefs. Its Tax Tips section includes 40 ideas for paying less tax.
Like the other commercial programs looked at here, TaxCalc caters well for pensioners, employed and most self-employed taxpayers but does not cater for partnerships. This reflects the fact that the majority of taxpayers who have to fill in a partnership return will need the services of accountancy professionals.
The majority of us, left behind by the great leap forward in computer literacy, will continue to sweat at our forms over the kitchen table, or pay a accountant to do it for us. For those who can use their computers, these systems offer the best mechanism to keep Hector off their backs for another year. Cheap at the price, really.
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