As HM Revenue & Customs works hard to collect £2 billion in unpaid tax from 2008-09 and 2009-10, accountancy firms have noticed that they are seemingly ignoring the latest self assessment tax returns submitted by taxpayers. Many of the tax calculations which are being received by taxpayers don’t take into account the information already provided in tax returns.

HMRC appear to be basing current year tax codes and income on the previous year’s Pay As You Earn figures, whilst totally disregarding the fact that a self assessment tax return has been submitted. PAYE should work in conjunction with self assessment to ensure calculations and tax codes are accurate, but this doesn’t appear to be the case for many taxpayers.

Basing calculations on the income in previous years can be especially detrimental to pensioners who may have reduced their income considerably. Including large amounts of income will have an effect on the age allowances received, resulting in large tax bills.

If you receive a tax demand, take care to check all the figures carefully and if you agree with the calculations, you may want to pay the tax owed either in one lump sum or through the next year’s tax code. If a self assessment tax return has been submitted to HMRC, this should be used to calculate your current year’s tax code, and any errors should be reported to HMRC as soon as possible to be rectified. Low cost accountants will be able to deal with HMRC on your behalf, ensuring you pay the correct amount of tax.

The Accountancy Partnership

We are a national firm of accountants that specialise in small and medium sized businesses. We have been trading since 2006 and have more than 1,000 clients across many different industries and areas of the UK.

Our staff has a wealth of experience and qualifications from the major accountancy and tax associations such as ACCA, AAT, ICPA, IFA, FTA.

Our clients receive many benefits including:

• Unlimited help and advice throughout the year — We offer our clients unlimited ongoing support for their business. We often find that new clients have lots of questions about running a business and about how the tax system works. We have heard every possible question many times before and therefore can offer new clients the very best advice.
• Free representation in the event of a HMRC investigation — If one of our clients is selected for a HMRC investigation then we will offer representation at no additional cost. We fight our client’s corner and ensure that our clients do not pay a penny more than necessary on the conclusion of the investigation.
• Dedicated Accountant — Our clients have their own dedicated accountant in which they can contact anytime. We feel this is important because it means our accountants can get to know their clients and build good relationships. All our accountants work from our main office and we never outsource work.
• Recommendations — With every piece of work we carry out for clients we look for recommendations that can be made. These recommendations can be anything from structuring the business in the most tax efficient way to recommending an insurance quote to reduce costs for clients.
• Free business guides — When a new client joins us we send them a free business guide. These guides outline in simple terms how the tax system works along with key dates and deadlines. Most clients find the guides to be extremely useful.
• Financial advice — We have a very reputable financial advisor who helps our clients to structure their finances in a way that best suits their needs. We always look out for circumstances where we think clients can benefit from financial advice and add it to their recommendations.

Please click here for a quotation for your business. Please also feel free to contact us if you have any questions or would like further information; 0800 0430 007, info@theaccountancy.co.uk.

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Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.