Two weeks to save your Christmas

The first deadline for self-assessment tax returns is just two weeks away. Miss it and you face some taxing paperwork

If you are one of the 9 million people in the UK who has to fill in a self-assessment tax return, then you have one urgent task over the next two weeks. Assuming you haven't already filled it in, then get cracking and do so!

If you are one of the 9 million people in the UK who has to fill in a self-assessment tax return, then you have one urgent task over the next two weeks. Assuming you haven't already filled it in, then get cracking and do so!

Why the haste? As you may have already seen on the Inland Revenue's TV ads featuring Hector the Inspector, 30 September is one of the important deadlines in the self-assessment calendar. And since this year, the date falls on a Saturday, then Friday 29th is your target.

There are a few provisos here. First of all, you may not be affected at all by self-assessment. If you are a pensioner, basic-rate taxpayer, or if you do not qualify to pay tax at all, then you can probably stop reading now. It is mainly higher-rate taxpayers, the self-employed or generally people with more complicated tax affairs who are affected. If you are unsure, call your tax office and check your position out.

Secondly, the 30th (or 29th) is not an absolute deadline in so much that if you miss it, you will not get fined or receive any chasing letters from the Revenue. But you will have missed your best chance of avoiding a lot of hard work later on. The end of September is the last date on which the Revenue guarantees to do the calculations for you - while you may be lucky and find that a return sent in later (say in November) still has this outcome, you are taking a chance. It might well be that you end up having to take on the UK's labyrinthine tax system and do the figures yourself.

That is something that people are well advised to avoid. Even though siren voices are now to be heard claiming that taxpayers would be best advised to do their own calculations because of Revenue errors, that is bad advice. Of course it makes sense to check the Revenue's figures, but why volunteer for hard work?

It's far better to use hard copy. The Revenue has had problems with electronic filing (though it says they have now been cleared up) and to avoid any risk, simply fill out the form and send it to them by post. By doing so, the tax office will calculate your tax liability for you and let you know before 31 January 2001 what tax, if any, you will have to pay. If the tax due is less than £1,000 and can be collected through PAYE, the tax office will include this in your tax code for the year 2001/2.

So what happens if you don't fill in the return by the 29th? You will (probably) have to calculate your own tax liability and then pay it as a lump sum on 31 January 2001, which is a genuine final deadline. If your return is not in by then, you will face an immediate £100 fine. You may estimate your bill but be warned, if you get it wrong there could be an interest charge and perhaps a surcharge. Also if your additional tax liability is less than £1,000 the tax office will not guarantee to include this in your tax code. In a few cases this could also mean that you will have to make payments on account next year, the first of which will also be due 31 January 2001.

There is one other deadline to be aware of. If you have not been sent a return but have a new source of income tax or capital gains which the tax office does not know about, you should notify them by 5 October 2000 that you require a self-assessment return. Failure to do this could result in a penalty unless you pay all outstanding tax by 31 January 2001.

* The Inland Revenue provides guidance and advice on completing tax returns on a telephone helpline (0645 000 444), charged at local rates, which is open from 5pm to 10pm weekdays and from 8am to 10pm at weekends. If you have access to the internet you can try filing your return via the Web. For further information, click on www.inlandrevenue.gov.uk

* If you decide to file via the web, the Revenue provides a phone helpline at local rates on 0845 6055 999

* The writer is a Tax Partner at KPMG

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