Top Tips For Filing Your Tax Return

Posted on: 20 January 2009 by Gareth Hargreaves

Filing your tax return is a job that simply has to be done. The following helpful advice should make the whole process easier and help you avoid late fees.

If you missed the deadline for filing a paper tax return in October 2008 you need to file online by 31st January 2009 to avoid a £100 fee. The forms have changed recently, so it's vital to familiarise yourself with the new format before you start.

Filing Penalties

If you missed the deadline for paper filing and do not want to file online you can still file a paper return and HMRC will process it in the normal way but you will incur a penalty of £100.

However, there is a “capping” rule for individual returns, which means that the £100 penalty will be waived if you do not owe any tax or you pay any tax that is due by the payment date of 31st January 2009.

Because your return was late, you will still be issued an automatic penalty notice and will have to appeal to have the fee waived.

If an SA800 partnership return is late, then each partner will incur a penalty of £100. The “capping” rule does not apply to partnerships so if you miss the paper deadline, then you will need to file online by 31st January 2009 in order to avoid the penalty

Budgeting For Tax Payments

Paying tax is always painful. It is more painful if you do not know how much you will have to pay and so have not budgeted for the full payment.

If you meet the paper deadline of 31st October 2008, then HMRC will tell you how much you need to pay before the payment date of 31st January 2009. However, that may be too late for you to find the money in time.

Tax BillThe sooner you know the tax due, the sooner you can begin to put money aside to meet it. If you use software like TaxCalc - - to prepare your return then the tax is automatically calculated for you and you know immediately how much you need to pay and when.

New Style Tax Returns

The new tax returns are very different to previous year’s forms:

  • The main return form now has only 6 pages.
  • Some of the entries you used to make there now appear on other forms such as the new “Additional Information” form.
  • The number of boxes have been reduced so that where there were several boxes last year there may now only be one box this year.
  • There are now two self employment return forms.
  • Although the capital gains tax (CGT) pages contain less detail, you now have to attach to the return a full calculation for each disposal - as a PDF file if you are filing online.

These changes make it very difficult to compare the forms year on year or to use last year’s return as a guide to completing this year’s form.

Start Early

Don’t put off the job of preparing your tax return just because the deadlines seem a long way away. The sooner you know the tax due, the sooner you can budget for it and remember that it may take longer because of all the changes to the tax return forms.

Remember you need to keep the records that you use to prepare your tax return:

  • Six years for businesses, rental properties etc.
  • Two years for non-business items.

Check Your Return Before You File It

HMRC uses software to analyse your current and previous returns which highlights anomalies and discrepancies – with particular concentration on businesses.

Take a moment to stand back and look at your return. Does it make sense? Have you missed something out or put in an extra zero in a number?

Looking at the previous year entry for each box will help you avoid such mistakes.

If there has been some change that has reduced your turnover or profit, then use the additional information boxes on the return to explain why.

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