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Tax return made easy - 12 things to remember when completing Self-Assessment

19 January 2017

The deadline for tax returns is less than two weeks away. Those who are self-employed, receive rental or savings income over certain limits, or who have made capital gains over the annual exemption of £11,100 for 2015/16 will need to complete their self-assessment by the end of the month. 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:

“According to HMRC around 870,000 tax returns were still outstanding after the 31 January 2016 deadline, providing a potential £87m penalty income for HMRC. Time is rapidly running out and people should start to complete their tax return as soon as possible, especially as it may take time to get the necessary information.

“People who have not logged into their online self-assessment records for some time will find that they now have a digital tax account. In time this will contain much of the information which now needs to be included on a tax return, and may mean that filing tax returns becomes a thing of the past. At present the account normally holds only pension and employment income details for the tax year, so taxpayers will still need to find information for other sources of income and deductions, such as gift aid and pension contributions. When logging on, taxpayers should also be prepared for HMRC’s two-stage verification process where an access code is sent to a mobile phone, and some additional identity verification questions.”

Here are 12 important points to remember when filing your tax return with HMRC:

  1. It’s up to taxpayers to register for self-assessment, and file a return. The deadline for filing a paper tax return for 2015/16 passed on 31 October 2016, so returns now need to be filed electronically by 31 January 2017 if you want to avoid a penalty. If you are not already registered for self-assessment it can take up to 10 days for your user ID and password to arrive in the post.
  2. Once registered, you should check whether you are able to use HMRC’s free software to complete your tax return as there are a few more complicated situations (for example those receiving trust income or living abroad) where commercial software may be needed.
  3. Make sure you have all of the relevant documentation: pensioners and employees should find details of their income on their digital tax account, but may want to check these from their P60s, and P11Ds for employees giving details of any benefits in kind. You’ll also need details of any investment income outside an ISA, as these are not yet reflected on your digital tax account. The self-employed and landlords will need records of their revenue and outgoings.
  4. 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.
  5. If you have made pension contributions in the year, check whether you have had the full relief that you are entitled to.
  6. 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.
  7. 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.
  8. If you have outstanding student loans and you are self-employed, you may be required to make repayments via your tax return.
  9. 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’.
  10. 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 2.75%. If payment is still outstanding after 30 days, a 5% late payment penalty may be charged.
  11. 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. It is worth being aware that as part of the move to international tax transparency, from September 2016 HMRC are starting to receive information automatically from various overseas jurisdictions on accounts, investments, and structures and will be likely to check this information against tax returns made.
  12. Finally for those who filed 2014/15 returns, remember that the deadline to amend these is 31 January 2017, so if any provisional figures were included, or any mistakes were made, these should be corrected by this date.

End

Notes to editors

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

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