Completing your tax return

We've put together a quick guide and some handy tips, but if it still seems too much, calling on a professional accountant to help is a good way to go.

With the deadline for completing postal self assessment tax returns coming up on 31st October, and the recent news that HM Revenue and Customs (HMRC) is demanding fines of £1,200* now is the time to turn our minds to our 2011/12 tax returns. Completing a self assessment tax return can be a daunting prospect. We've put together a quick guide and some handy tips, but if it still seems too much, calling on a professional accountant to help is a good way to go.

Our Top 5 Tips

  • Remember -you have until the 31st October to return your form by post.

  • Don't delay sending your form if you don't have all of the information needed together. Simply include a note to say that the information that you have supplied is provisional

  • You can give estimates on what you think you spend, or use receipts as an example to calculate expenditure for the rest of the year.

  • You can get relief on Gift Aid donations - make sure you claim relief on the supplementary pages.

  • Give explanations of any changes in circumstance - this could mean your form gets processed more speedily.

What Exactly Are They And Do They Apply To Me?

Self assessment is HRMC's system for individuals who don't pay tax on their earnings through Pay As You Earn (PAYE), enabling them to calculate and pay tax on the money that they earn. Self assessment forms are issued every April, covering the previous 12 months - the tax year to the 5th April that has just gone by.

Self assessment tax returns are normally required for individuals who are:

  • Self employed

  • A company director

  • A minister of religion

  • Getting income from letting property or land that you own

  • A member of Lloyds of London insurance and reinsurance market

  • Receiving annual income from a trust or settlement, or income from the estate of a deceased person, and further tax is due on that income.

  • Getting a taxable foreign income, even if you do not normally reside in the UK.

HMRC will normally automatically send forms to those who need them. If they have not sent you one, and you believe you should be filing one, it is your own responsibility to ask for one.

How Do I Get Started?

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Firstly, you'll need to decide whether you want to complete it online or by post. If completing it online, you will need to register, but you will have three month longer (until the 31st January) to file it with HMRC. If returning your form by post, you will need to have it with HMRC three months earlier (by 31st October).

The online route is becoming ever more popular - once you have registered you can save as you go along over several sittings, your tax is calculated for you, it can be sent and acknowledged at the click of a button and your form is likely to be processed more quickly.

The next step is getting your paperwork together. Keeping your paperwork up to date is a legal requirement. Make sure you have it all together and organised to help smooth out the calculation process.

In the unlikely event that you need to send off an item of paperwork, you should keep the originals and send copies. Then you will need to complete the SA100 form, as well as any relevant additional sections - these will be sent automatically with your self assessment tax return pack, which will also include the HMRC guide to filling in your return. It's best to check online that you have been sent all of the relevant forms, and if you need any others, you can print them out from the website. You need only answer the questions that apply - there is no need to put any mark in the sections that don't. When your self assessment tax return forms are completed, ensure that you have included all the relevant pages and information and that you have signed the last page, and take a copy before you send them off. Once you have sent them off and you've paid any money due you can relax for a few months, simply collecting your paperwork for the next time around. And after completing your self assessment tax return once, you may well find it a much less challenging process the following year.

Documents you will need to have at hand include:

  • Self employment accounts

  • Details of pay and taxable expenses and benefits received from your employer

  • Your P60

  • Bank and building society statements

  • Paying in and chequebook stubs

  • Any dividend vouchers

  • Details of any capital gains realised

  • Paperwork for other income, such as investments, savings, pensions, property or benefits

  • Documentation of anything you can claim for, such as self employed expenses or charitable donations.

* made up of the maximum £900 in daily penalties for non-payment of tax returns plus an additional £300 or 5% late filing penalty, whichever is highest