Self-assessment tax returns have become increasingly more difficult to understand and complete correctly. This has led to an increase in penalties issued by HM Revenue & Customs for late submissions and inaccuracies.
If is easy to make unintentional errors if you are not familiar with the self assessment tax return. There are more subtle and more far reaching changes made to the self assessment tax return each year. It is therefore not advisable to simply copy the tax return you completed last year, as this can mean that mistakes are repeated and information continues to be omitted.
Self assessment tax returns are generally required to be filed on an annual basis for the following categories of taxpayers:
Nowadays HM Revenue & Customs – GOV.UK have sophisticated means of knowing what should be shown on a particular tax return as they receive a lot of information directly.
Each time a payment is made to employee or a pensioner, it is reported to HMRC using ‘Real Time Information’ (RTI). This means that HMRC hold a very accurate and up to record of your PAYE income.
HMRC also receive details of bank and building society interest directly from savings institutions, both in the UK and overseas.
They are also notified of rental income paid to landlords via a letting agent. A record of property purchases and sales is held by Land Registry, which HMRC have access to.
The introduction of the Trust Registration Service means that HMRC have a much more detailed and up to date record of which trusts have been set up and by whom. They also hold a lot of personal information regarding the trustees and the beneficiaries.
When someone dies, a copy of their Will is on the public record, so that details are known of the deceased, their assets, and the intended beneficiaries. When a Grant of Probate is applied for to enable a death estate to be administered, this provides HMRC with a much more detailed account of the deceased assets held at the date of their death.
With the increase in technology and the sharing information between institutions, it is more likely than ever that HMRC will know what sources of income should be declared on your self assessment tax return before you do.
You must take care completing your self assessment income tax return and make sure that details of all income and capital gains are included. Any errors or omissions may lead to unwelcome tax enquiries by HMRC into all aspects of your tax affairs, resulting in interest and penalties.
Not all sources of income are taxable and you need to be able to identify which ones need to be included on your self assessment tax return and which ones can be disregarded.
The most common types of income which are tax-exempt and can be ignored when completing your tax return include prizes from Premium Bonds and lottery winnings, as well as interest and dividends from ISAs. There are also some state benefits which are specifically tax-free, as well as some other sources of income.
You have until October 31st to send your paper tax return to HMRC or until January 31st following the end of the tax year if you file online.
If you have been issued with a self assessment tax return for the first time after 31 October, you have 3 months from the date of issue to complete and submit it without incurring a late filing charge, or 2 months if you want HMRC to calculate the tax due, rather than using a professional agent to represent you.
For more information: Self Assessment tax returns: Deadlines – GOV.UK
I have many years’ experience dealing with self assessment tax returns and have completed several thousand over the course of my career.
I use HMRC approved software. My in-depth experience and expertise will give you the peace of mind that everything is being handled correctly, all relevant income is being disclosed and your tax position is accurately calculated and your return filed on time.
It is a well-known that an unrepresented taxpayer is much more likely to be selected for an enquiry, than a taxpayer who uses a professional advisor for obvious reasons.
I complete self assessment tax returns for the following:
The Tax Angel can help with all aspects of self assessment tax return preparation and submission, please get in touch for a free, no obligation chat.
With over 30 years’ personal tax experience working across the North West and North East of England, in both accountancy and law firms, I am well placed to deal with all your personal tax requirements.
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