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Tax return made easy - 12 things to remember when completing self-assessment

27 December 2015

The deadline for tax returns is only a month away now. Those who are self-employed, receive rental or other income on which tax is due, or make capital gains over the annual exemption of £11,000 for 2014/15 will need to complete their self-assessment by the 31st of January. People who receive child benefit and where the higher earner in the couple has income of over £50,000 are also affected.

Patricia Mock, tax director at Deloitte, said:

“If you’re already completing your Tax Return online you may find that in future years the process will be easier, as HMRC move to a digital tax system. A few weeks ago they launched the new digital Personal Tax Accounts. At present, the information shown is limited, but HMRC will be adding more services to the accounts over the coming years, which may, in future, reduce the need for annual tax return completion.”

In the meantime, here are 12 important points to remember when filing your tax return with HMRC:

  • It’s up to taxpayers to register for self-assessment, and file a return. The deadline for filing a paper tax return for 2014/15 passed on 31 October, so returns now need to be filed electronically by 31 January 2016 if you want to avoid a penalty. It can take up to 10 days for your user ID and password to arrive in the post, so it’s best to register sooner rather than later.
  • Once registered, you should check whether you are able to use HMRC’s free software to complete your tax return as there are certain more complicated situations where commercial software may be needed.
  • Make sure you have all of the relevant documentation: pensioners and employees will need their P60s, employees may need P11Ds for details of any benefits in kind. You’ll also need details of any investment income outside an ISA. The self-employed and landlords will need more extensive records of their revenue and outgoings.
  • Gather details of any professional subscriptions that you paid in the year, which were not reimbursed by your employer. If the organisation is on HMRC’s approved list, your subscription should be deductible from your employment income.
  • If you have made pension contributions in the year, check whether you have had the full relief that you are entitled to
  • Remember to check your charitable donations under the gift aid scheme. Like personal pension contributions, gift aid donations may attract additional relief if you are liable to higher rate tax.
  • Have you got married or separated during the year? Income from jointly owned assets, such as rental profits, can sometimes be treated differently depending on whether the owners are married.
  • If you have outstanding student loans and you are self-employed, you may be required to make repayments via your tax return.
  • You can use provisional figures in your tax return if the final figure is not available, but it is important to provide the final figure as soon as possible. HMRC will charge penalties if the original return is considered to have been filed ‘carelessly’.
  • Even if you can’t finalise your tax return yet it’s a good idea to check roughly how much tax you are likely to need to pay by 31 January so that you can ensure your finances are in order. Any amounts paid late will attract interest charges - currently 3%. If payment is still outstanding after 30 days, a 5% late payment penalty may be charged.
  • Check and double check all of your details and ensure that you have accounted for everything. HMRC receive a lot of information directly from third parties, so if anything has been omitted, an enquiry may well be opened. Penalties for inaccuracies in tax returns are much harsher if HMRC spot them first, so it’s best to make sure that all bases have been covered.
  • Finally for those who filed 2013/14 returns, remember that the deadline to amend these is 31 January 2016, so if any provisional figures were included, or any mistakes were made, these should be corrected by this date.

Saskia Graepel
Deloitte LLP
0207 007 7264
sgraepel@deloitte.co.uk

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