Happy returns - part one
If you have to complete a tax return by the end of January, you could save yourself some hassle by doing it online. Read on to find out how to do it
Nobody panic, but 31 January is not far away. For many people in ordinary full-time employment that won't matter, but for the self-employed, company owners or anyone who has to submit their tax return, it's crunch time. If people don't get their returns in before 31 January they're liable for a £100 fine plus interest on any payment that remains outstanding. Oh, and if anyone is submitting at this stage then they have to calculate how much tax they owe Her Majesty's Revenue and Customs (the current incarnation of what used to be the Inland Revenue and Customs and Excise) would have worked it out had it been submitted before 30 September. If this looks like an area of concern, good. It's something that needs attention and tax is a statutory obligation that needs to be taken seriously. It's not, however, a reason to panic. The Government has made it possible to submit online for some years now the calculation is automatic and there's third-party software available to help even before then.
Easy tax?The online tax return system is made by a company called EZGov and is compatible with all of the Government's public systems. Why is this an advantage? Because people have more than one reason to get in touch with the Government electronically. If you have ever registered for a Government service online, then the same ID and key that got you through to that service will also work for the self-assessment system. A lot of people now use the system, as the people at EZGov are keen to stress. Last year the figure reached two million and this year it's widely predicted that three million will do the same thing; retention rates are good, with nine out of 10 people who self-assess online once doing it again the following year.
Early birdThe process is simple enough and the key is to start early. This is important because the Government will want to send out a password by post, as it's deemed more secure than any other form of communication. A good place to start is www.hmrc.gov.uk/individuals/tmaself-assessment.shtml which offers a portal to information and assistance before you start to fill anything in. There is a separate section for self-employed people who have to fill in a supplementary form since they won't be paying through the PAYE system. Assuming someone has gone through the information and established whether they're an employee or self-employed, they then move to the welcome page at https://online.hmrc.gov.uk and either register or enter their login and password. Registration is straightforward but it needs to begin in time for delivery of login information, which will include an activation Pin. The site says this will arrive within seven days; common sense dictates that during January the demand will be higher than normal so it's worth allowing extra time. People wanting to self-assess online need their unique taxpayer reference number and either a national insurance number or a postcode to start off the process. The process itself is a simple matter of filling in the usual name and address details, creating a password, putting more details in, clicking to accept the terms and conditions, noting an ID then waiting for the Pin.
Keep everythingAssuming this has been taken care of, the principle on which the self-assessment process works is that it is as much like the paper-based version as possible. It's still important to keep receipts in order and information about any income over the 12 months to April 2006, but the web authors have done everything they can to make it simple. Every screen has a 'contact us' link in the top right-hand corner, as well as a shaded bar showing how much of the form has actually been filled in. The first screen has all of the standard name and address details filled in already but there's an opportunity to amend the records if necessary. After this you are then asked about the types of income you have had during the financial year, which is important because the system has to decide which forms to present (land and property owners have a separate category to fill in, as do self-employed people, people in partnerships and some others). This next bit of information is very important. If your income type isn't shown on this form, then you can't actually assess online the forms are designed so the majority of people can use them but this might not mean you. The system then walks through the most common forms. Employees in full-time or part-time jobs fill in the SA101 and are then sent back to the main form, SA100, which asks about investments, building society income, share dividends, state retirement pensions, capital gains from insurance and other taxable income. Clicking through these with an affirmative takes the user to the section on interest from UK banks and internet accounts, and this includes sections for instances in which people have or have not paid tax. Unit trusts are covered here and people with more than one unit trust simply click on the link to get to more forms. Written by Guy Clapperton for Computeractive magazine
To read more on this story, go to part two
This article was created: 28 November 2006.
This article was last edited: 21 December 2006.
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