MORE than two million taxpayers have yet to file their self-assessment forms, even though the January 31 deadline is less than two weeks away. We answer the questions of readers determined to tackle the task this weekend.
How many people does self-assessment affect?
It might make you feel better to know that self-assessment covers about 9.8 million people, including higher-rate taxpayers and the self-employed.
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You must complete a form if you have received any income or capital gains that have not already been taxed. This includes any interest on bank or building society deposits, on which you will be liable for additional tax if you are a higher-rate taxpayer (with annual earnings of more than £37,300). For further information go to www.hmrc.gov.uk/sa/guidelines.htm.
What documents do I need?
The form covers the period from April 6, 2004, to April 5, 2005. If you are an employee, you need the following forms: P60 (earnings and tax deductions) and P11D (benefits statement). You also need details of any charitable donations made under Gift Aid, personal pension plan contributions and any income from savings and share dividends. The self-employed must provide details of all the income they have earned from different jobs.
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Do I have to calculate how much tax I owe?
Yes, unless you use the online filing service, where your bill will be calculated for you. Attach a cheque for the amount that you owe or make a debit card payment online at the Revenue’s website. If you are self-employed, you will need also to pay an amount of tax on account to clear tax owing in the current tax year, 2005-06.
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How does the online filing system work?
If you decide to file online, the January 31 deadline still applies, but you must make a request to use this service by January 24 at the latest. Your personal authorisation code — without which you cannot use the service — can take three to four working days to arrive.
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Where can I get help?
Free advice is available online at www.accountingweb.co.uk/self_assessment. This is an advice forum endorsed by the Revenue. IFA Promotion, which promotes the work of independent financial advisers, also has a free guide. Go to www.taketaxaction.co.uk or call 0800 0853250. If you want an accountant to do the work, you can find expert help at www.taxassist.co.uk or www.grantthornton.co.uk.
I have not been sent a form. Have I been let off?
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Not necessarily. It is your duty to let the taxman know if you suspect that you could owe some tax. For example, tax at the rate of 20 per cent is deducted from bank and building society interest before it is paid out. However, if you are a higher-rate taxpayer, you are liable for additional tax on this income. If you are letting out a flat to tenants, you are liable for tax on the rental income, subject to deductions for expenses.
Contact Revenue & Customs either via the helpline on 0845 9000444 or online to request a self-assessment form immediately.
Do mistakes matter on the form?
Yes. If there are discrepancies in the form, you could find yourself the subject of a Revenue inquiry. Always provide actual figures and round them up to the nearest pound, in your favour. Double check everything and make sure that you do not forget to sign the form, which is the most common mistake.
How can I make sure that I get it right?
John Whiting, a tax partner at PricewaterhouseCoopers, the accountancy firm, says: “You need to treat the whole exercise like an exam in which you have to get 100 per cent. Read all the questions and answer everything that is required.”
If you need to complete supplementary pages, be sure to include them in your return.
For more tax news and advice and your chance to leave your views on self-assessment click here