Timely tips for your tax return

It was billed as the simplest tax form in the world. When the Inland Revenue launched its new self-assessment forms in April this year, inquirers were told filling one in was a doddle.

Since then, of the more than 8.5 million sent out to individual taxpayers, barely 20 per cent have been returned to the Revenue ahead of the September 30th deadline for having any tax owed calculated for you.

After that, the next deadline is January 31st - but only if you are prepared to calculate the amount of tax you owe yourself. Given the looming potential scale of disaster waiting to happen, many people are unlikely to choose that option.

Of the two million returned forms, mistakes have been spotted in about 40 per cent of cases, although the vast majority have been simple errors. However, some 120,000 have been sent back to taxpayers as "unfit for processing".

My own experience may be typical. Although I filled in all the details of my earnings, I failed to add up one column. As a result, I was informed by the Revenue that I was owed pounds 560 in overpaid tax. Sadly, a call from me (honest but stupid) revealed it was the other way round and more.

It is becoming clear that despite the brave face being put on it by the Revenue, the likelihood of a flood of mistaken forms being sent in between now and the end of the month - many of them reluctantly completed by "form- filler-phobes" - is increasingly high.

TAX etc, a firm of chartered accountants specialising in tax issues, offers the following tips to help people through the maze:

Gather all your records, including employment details (P60, P45, P11D), self-employed income, details of expenses and records of other income (bank and building society interest). You will need to keep this information for two years.

Make yourself aware of the allowances you may be entitled to, especially married couple's allowance and the additional person's allowance for single parents. Each are worth pounds 268.50 to taxpayers.

Make sure you know why you are being asked what information to put down on your tax form. If in doubt, call the Inland Revenue or contact an accountant. Don't "guesstimate" anything.

Check whether information given by your employer in relation to benefits in kind, such as company cars and other expenses, is correct and the same as on your tax return. In many cases employers have agreements with the Revenue that mean you don't need to fill in that part of the form. Find out whether this applies to you.

Remember to look at your tax position last year. If underpayment was made then check that this has been carried through to this year's PAYE code.

If you are a higher rate taxpayer and have a private pension or make payments to charities, you are entitled to extra tax relief on your contributions.

Set aside one or two evenings before September 30th to make sure you have all the answers to each question on the tax form. Give yourself at least a couple of hours to fill in the form.

If you want the Revenue to collect outstanding tax through PAYE (up to pounds 1,000-worth) next tax year, you must send in the form before the 30th of the month.

Beware the consequences of getting things wrong or sending them in late. The penalty for late returns is pounds 100, plus a further pounds 100 if it is sent back more than six months late.

Above all, don't panic. The forms are nowhere near as complicated as they seem at first sight. Grit your teeth and do it.

TAX etc can be contacted on 0171-614 0056.

Nic Cicutti

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

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