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Happy returns - part two

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

No mistakes

By this stage many people will be concerned that they might have made some errors. This is where the button on the left marked 'Check' comes in handy; clearly the software can't make sure the figures being entered are accurate, but it can ensure that there are no omissions or entries that simply don't make sense. It will check an entry and confirm it is error-free, and the next button down - for which people usually like to sit down - will show the tax calculation.

The next stage is to save a tax return; there is no need to submit it just yet. A black-and-white version that downloads quickly is available or it can come through as a Pdf. People wanting to run their submissions past someone else will find these alternatives invaluable. At this stage the form is 95 per cent complete, and it will only be deemed fully complete once you have hit the 'submit' button. This is the point of no return, after which no changes can be made. The next screen says the return is being processed and finally the system says it has been submitted.

Easier once you start

Talk to people who've used the system and they tend to give you glowing reports. Kate Hammer works for PR company Tannissan Mae and used online self-assessment for the first time last year. 'It definitely saved me the frantic rush to the Euston Road Inland Revenue office on a bitter January evening,' she says. 'The previous year I faced queues so long I had to hand my A4 brown envelope to a stranger or risk leaving my baby daughter stranded at her nursery.

'There could be improvements though,' she believes. 'Where the system falls down is with the registration process. Why put a 28-day lifespan on the password? One friend of mine had to request three passwords before she actually got round to the first log-on. I'm sure she's not the only one. If the Government is committed to moving filing online; the natural tendency to procrastinate when it comes to taxes has to be taken into account.'

Overall Ms Hammer clearly had a good experience. So if it's that simple, why do people use accountants at all? Anne Porter is director of the tax division at software house MYOB and says that even in her industry people make mistakes. 'We get colleagues saying, 'hey, I filed my tax return online yesterday', she says. 'And we say, 'good, did you remember to claim for all of your mileage?' And they say, 'what mileage?'

A good accountant, she stresses, will know the system and what's claimable compared with what isn't. Even if it's only a qualified person giving a submission a quick once-over, they'll know more than anyone else about any areas that might have been missed and their client is less likely to end up paying too much tax. Be warned, though: if they mess up, it's still the individual's legal responsibility to ensure the records are correct and up to date.

Law firms agree that there's legal responsibility attached to getting an assessment in on time and often welcome the idea of online submission. Marcella Shone is director of law firm Dickinson Dees: 'There are distinct advantages to processing your tax online and if you submit your return before December 30, it's possible to pay your tax through next year's pay packet. Online submission also means any repayments are processed much more quickly,' she says.

However, experts at Dickinson Dees warn that although self-assessment online is an effective way to process tax returns, many people forget to include common deductible items. 'These include Gift Aid donations, personal pension contributions, professional expenses and subscriptions to certain professional and trade bodies. As a result, they could be paying more tax than they need to,' Shone says.

Friendly accountants

Accountants don't always welcome the idea of lots of people assessing online because the system isn't always user-friendly when dealing with multiple account submissions. It certainly has had its flaws; make a mistake and move back to another page and it'll have 'forgotten' whatever had been put in a minute ago. This has now been fixed but might have shaken previous users' confidence. People who go through accountants might be bemused to note that even when they're going down the electronic route, they still need to produce a physical signature. Accountants hate this because they have many physical signatures to chase up.

This isn't the user's problem, of course, and companies including MYOB are working on software for accountants to make their lives simpler too - sending information in batches overnight rather than submitting all at once at 4.30pm on 31 January will be one feature they'll be pleased to welcome, for example.

Sage is another company very much in the accountancy market that welcomes the online system. 'We started including technology for online submission of some sort a while ago with an application that included faxes, and now produces something with the full self-assessment form as well as supplementary pages,' a representative said. Sage doesn't offer anything for the individual filing online, partly because that's just not its market but also because, like MYOB, it believes people are actually better off if they filter the information through an expert. Clearly, vested interests are at work here, but the point is valid for anyone who is in any doubt as to their entitlements.

One side note is that many people will have heard of Lord Carter and his proposed amendments to the self-assessment rules. Essentially, in the last budget the idea was 'floated' - in such a way that prompted many accountants to take it as fact and inform their clients - that the date of self-assessment should be moved further in line with the rest of Europe. This would have meant submitting in November rather than in January. However, the idea has now been put on ice and won't be enacted in the near future. MYOB's Porter welcomes the decision: 'January 31 works because people are used to it,' she says.

'Talk to our accountants and ask them what they think and they'll tell you it doesn't matter what the date is from the technical point of view but you have to get the information out of the client.' And by now, January 31 is hard-wired into clients' psyches.

Taxing times

Essentially, anyone scrambling round trying to track down paper receipts at this late stage needs to look at their filing system for next year. Anyone who hasn't been saving enough for their tax is more likely to need an escapologist than a piece of software, but if they contact the tax people first, they're very likely to be helpful.

But if you're among the majority who've kept receipts in a folder and written everything down, either on paper or onscreen, the process should be relatively painless and the IT behind it is genuinely helpful.

Written by Guy Clapperton for Computeractive magazine

This article was created: 15 December 2006.
This article was last edited: 21 December 2006.

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