Personal finance: Tax returns: your worries solved

It reduces grown men to tears - but self-assessment is here to stay. And in fact it's not that bad. Take a tip from Sara Williams
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The Independent Online
It's that time of year again - when the Inland Revenue's new regime looms large on the horizon. But don't worry; we have the answers to all your questions

Q: When do I have to get the tax form in?

A: The rule is that the form has to be in the hands of the Inland Revenue on 31 January (a Sunday). The Revenue says that if your form is in their office when first thing Monday morning, then it's on time. If it's not there, it's late. So be certain to post it first-class, probably on Thursday 28 January.

A lot of tax offices will be open on Saturday or Sunday depending upon staff agreeing to work. Details should be in the local press, or phone up your local office to find out if you can drop it in by hand.

Q: What do I have to get to the Inland Revenue?

A: You have to send in your completed tax return for the previous tax year (1997/8), plus the tax calculation and a cheque for the amount of unpaid tax you have worked out that you owe the Revenue.

You will also have to make your first interim payment of tax for the current tax year 1998/9 (you should have received a Statement of Account telling you how much that is).

Q: If I don't get my tax return in on time, what are the penalties?

A: You will face an automatic pounds 100 penalty plus interest on your unpaid tax bill. If you still haven't paid your tax by 28 February, you will also face an interest surcharge of 5 per cent of tax owed but not paid.

Q: Is it too late to start completing my tax return?

A: No. You should still be able to get it completed on time. Start now by finding out whether you have got all the forms you need. If you are missing any you can get them by phoning the Inland Revenue Orderline on 0645 000 404. You should also start gathering your documentation together, such as Form P60, certificates of interest paid for your mortgage, share dividend counterfoils and so on. You may need to ask your bank, building society, pension company and so on for particular information.

Q: What shall I do if I am missing information?

A: The Revenue will accept estimates. You must, however, provide accurate figures and documentation as soon as possible. The estimates should be realistic and reasonably close to the final figure. Make sure when you enter the figures on the form you say they are estimates and spell out the problem in the section left for "Additional Information".

Whatever you do, do not miss the 31 January deadline. That will just make the Inland Revenue unsympathetic.

Q: What if I don't understand the forms?

A: Ask the Inland Revenue. You can phone your local tax district to ask specific questions. And there is an out-of-hours helpline number 0645 000444 (open until 10 pm).

Q: How long a job is this going to be?

A: It's difficult to say how long it will take you to get your documentation together. But once you start filling in the form with all your documents to hand - and with the right attitude - it shouldn't take much longer than a couple of hours.

Q: Is my form going to be checked by anyone?

A: Yes. The first thing that happens is that the tax officer transfers figures into the computer to highlight arithmetic and simple errors. However, if the figures all add up, it won't be obvious that it is incorrect.

By law, you are required to notify your tax inspector of any income or capital gains not previously declared within six months of the end of the tax year in which you make the income or gain. While it won't be apparent in your tax return if you have failed to do this, the Revenue can make an inquiry into your self-assessment return. Last year, around 45,000 taxpayers were notified that this was going to happen, some 8,000 of them chosen completely at random. This year it could be you...

If you have got your tax return wrong, you have a year to make a correction (ie by 31 January 2000) without anything terrible happening.

Q: What mistakes should I try and avoid?

A: There are some pretty obvious ones. Common mistakes include failing to sign and date the return, attaching pieces of paper with additional information instead of putting it direct on to the return, failing to ask for a repayment of tax when one is due and failing to send in a supplementary page which is required.