September marks a painful watershed in the year as children put the joys of summer holidays behind them and return to school. But it also brings a grim reminder for millions of adults: the end of the month is the deadline for returning self-assessment forms if they want Customs & Revenue to calculate any tax they may owe.
Hard-pressed taxpayers could be forgiven for losing track of the key dates amid the flurry of changes to tax deadlines announced by the Revenue in recent months.
The changes will come into force for returns covering the 2007-08 tax year. The final deadline for filing paper self-assessment forms will be brought forward from January 31, 2009, to October 31, 2008. Those missing the deadline will face a £100 fine.
The cut-off date for online filing was also due to move forward to October 31 but will now remain January 31 after complaints by accountants that advancing the date would cause undue disruption to them and their clients.
The Revenue has not yet decided on the new cut-off date for people who file paper returns and want the Revenue to calculate their tax. At the moment it is September 30.
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However, a lot of people fail to take advantage of the benefits of early filing, says Leonie Kerswill, tax partner at PricewaterhouseCoopers, the accountant. Last year nearly five million people out of more than nine million who had to complete self-assessment returns missed the September 30 deadline. If they had returned their forms in time, they would have had their tax calculated for them. And if the amount owed was less than £2,000, it could have been collected through their tax codes.
One of the advantages of handing in your return in September is that the Revenue will tell you in good time how much tax, if any, you need to pay by the following January. If you leave it until the last minute and have to calculate the figure yourself, you could end up underpaying and being stung for interest charges and surcharges on the deficit.
Ms Kerswill says: “Completing your tax return by September 30 can potentially save a lot of time, hassle and money. Sending in your return earlier does not mean that you have to pay tax earlier, but the sooner you complete your tax return, the more time you have to ask for help from the Revenue if you need it.”
George Bull, of Baker Tilly, the accountant, says that those who file their returns online have more leeway. When they complete their returns over the internet the software will calculate their tax liability automatically.
Ms Kerswill says that there is a series of measures that taxpayers can take to assist them in completing the forms correctly. If you are filing a paper return, make sure that you have all the right pages. Sort out all your paperwork, such as payslips or business accounts, before you start. You need to keep records of all information used to complete tax returns for 22 months after the end of the tax year, or for five years and ten months for those carrying on a business or letting out property.
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Check that any interest and dividend amounts add up, but do not include investments in individual savings accounts (Isas), personal equity plans (Peps) or pension contributions to an employer’s scheme.
There is no need to calculate figures down to the last penny — you can round up or down to the nearest pound.
Finally, keep a photocopy of your form and remember to sign and date it and send it in good time.