Bamboozled by that tax form? Start here

THE END of September is approaching, and with it the deadline to send back your tax return if you want the Inland Revenue to calculate your tax bill for you.

It is also the final deadline if you have a modest tax liability of less than pounds 1,000 and want this to be deducted from your salary next year through the PAYE system, otherwise it may all become due as a lump sum in January.

Last year's experience showed there are some parts of the self-assessment form that are causing problems for the unwary. Tax professionals at the Chartered Institute of Taxation have sorted out several of the most common pitfalls:

First of all, many taxpayers still do not realise they cannot get away with filling in the form with phrases rather than figures. At the very least you should estimate a figure on the basis of the information you have. Indicate on the return that it is provisional, and will be updated when the figure becomes available. Tick box 22.3 and explain in the space for additional information why the full information is not available and when it is expected.

If you are self-employed it is often worth sending accounts and computations with the return if they contain additional information that the tax office may need to understand the figures. This will ensure full disclosure to the Revenue. It is still essential to complete the boxes on the return (and on the supplementary pages where appropriate) with figures from accounts or computations.

This is particularly important if you have the self-employed supplementary pages. Boxes 3.16 to 3.52 demand a breakdown of self-employed income and expenses where the turnover is above pounds 15,000. This breakdown will in due course be used by the Revenue in their inquiry procedures.

The headings on the tax return may be different from those shown in your accounts and it may be necessary to add together figures to show the best fit with the boxes on the form. It is important that the allocation is done on a consistent basis each year, otherwise the computer will identify an unexplained variance.

One confusing section of the form is question 19, which says "do you want to claim a repayment if you have paid too much tax?" Many people last year answered "no" on the basis that they owed tax to the Revenue for 1995/6 or earlier years. Unfortunately those years are handled by a different computer and the effect is that any over-payment this year will not be used to offset the earlier underpayment. It may be better to ask for the repayment and note in the additional information that the repayment should be set off against the earlier years' liabilities.

Box 22.4 asks if you have made payments of rent to someone outside the United Kingdom. This does not refer to the holiday villa you rented in Spain. It does apply if you are renting property in the UK and are paying rent to a non-resident landlord. (So many people were confused by this last year that it is being dropped for the 1998/9 tax returns.)

Question 16 on allowances is also a problem. It refers to the additional personal allowance available in some circumstances if you have a child living with you. Many married couples with children have claimed both the married couples' allowance and the additional personal allowance for children. In fact, this is only available to one-parent families, or to a married couple where one partner is disabled. The 1998/9 return will contain an additional box to make this clearer.

Most of the returns rejected by the Revenue are sent back for basic reasons. Apart from mathematical errors and transpositions, many people ticked the box indicating that a supplementary page was attached and then forget to include it.

Where possible the Inland Revenue will correct any errors and send you a notice of correction, but you should check the revised figures to make sure you agree with the amendment. Fortunately, the most common mistake is also the easiest to sort out: forgetting to sign or date the return.

Nigel Eastaway is chairman of the technical committee at the Chartered Institute of Taxation.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat