Self-assessement deadline looms
Taxpayers could be hit fines of more than £470 million if they fail to meet the 31 January online self-assessment deadline.
Self-assessment tax returns must be filed online by 31 January or penalties will be incurred. Experts say people must act quickly as the process can be stressful if left to the last minute.
Last year, the self-assessment process was given its first ‘makeover’ since it was introduced in 1996, with the biggest change being a new deadline of 31 October 2008 for paper applications.
For online returns, the deadline remained 31 January 2009 but now this date is rapidly approaching and there are no second chances if you miss it - the penalty is an initial £100 as well as a £60 fine per day.
Tracy Ebdon-Poole, chief executive at TaxCalc.com, says: "Completing a tax return is challenging enough for the majority of taxpayers let alone having to cope with new forms that look completely different and a change of filing deadline.
“For example, none of the box numbers correspond with the previous year’s form, so anyone who relies on previous returns to help complete their 2008 return is going to find it particularly difficult.”
If you still haven’t paid your tax by July, then you will be charged another £100 – a year late and you could end up paying up to £3,000.
This year the taxman is set to collect £479 million in fines from taxpayers who miss the deadline, file incorrect information or simply fail to pay their tax, according to Unbiased.co.uk, the online Find an IFA search.
David Elms, chief executive of Unbiased.co.uk, says: "The penalties for those who return their self-assessment forms late or incorrectly remain unforgiving, so now is the time to take tax action.
"Missing the HMRC's deadlines inevitably results in hefty fines, and in the current climate more than ever we would urge consumers to avoid this by ensuring that their forms arrive on time and in order.”
Anita Monteith, technical manager of the Institute of Chartered Accountants’ tax faculty, recommends splitting the process into manageable chunks rather than attempting to tackle it all in one weekend.
If you haven’t already registered with HM Revenue & Customs’ online service, do so as soon as possible as this process can some time to complete. You should make sure you have registered by 21 January if you don’t want to miss the deadline.
Monteith says: “For all those who are due to file their self-assessment tax return online for the first time, it’s critical to get started now as it takes some time set up a new registration on the system.”
Once you have registered you will be given a User ID and an activation PIN – but this could take around five to seven days to arrive through the post.
2. Organise your information
While you are waiting for your PIN to arrive, it is a good idea to get all your paperwork together. This will make your self-assessment easier to fill in once your account is activated.
Documents to dig out include your employment income, including your P60 and P11D, any interest statements from your bank or building society, and information on dividends from shares.
Don’t forget to collect the details of all your deductions, such as Gift Aid and pension contributions.
3. Filling out your return
As soon as your PIN arrives you should activate your account. If you have time, then make a start of filling out the online return form – you don’t have to complete the whole process in one go, and the sooner you get it done, the sooner you can stop worrying about it.
Make sure you save the information your entered on each screen as you go along. If you make a mistake then don’t worry, as you can always go back and make changes later.
4. Pay your tax
Once you’ve completed your tax return you also need to make sure you keep to another 31 January deadline – paying your tax. You can do this by over the phone or internet, using Direct Debit or by post are just some of the options. However you choose to settle your tax bill, remember that some payments take a few days to clear so leave enough time.
Quick self-assessment tips:
* Monteith warns that HMRC may question any significant changes from your last return, so don’t forget to explain any differences clearly in the section for further information.
* Once you’ve completed your tax return, make sure you save it property and print off a copy of the receipt.
* For legal reasons, you should also keep all the information you used to complete your tax return.
* Before you submit your tax return take a moment to review all the information you’ve entered to check that nothing has been missed, everything makes sense, and figures are correct.
A financial adviser who is not tied to any financial services company (such as a bank or insurance company) and is authorised by the Financial Services Authority (FSA). They can advise on financial products to suit your circumstances. All IFAs have to give consumers the choice of paying by fees or commission and have to explain which would best suit the customer in that particular instance. Also, if commission is paid either by the client or the financial service provider recommended by the IFA, the IFA must disclose what that commission is.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.