A question which is often asked by many people is ‘can I do my own tax return?’. The answer usually depends on how complicated a person’s tax affairs are. The first step is to decide whether you need to complete and submit a self assessment tax return. There are a number of instances which require you to complete a tax return. Some of those instances may not be too complicated, in which case you may feel confident about completing the tax return yourself. However, other circumstances may need prior knowledge of a subject which you may not have.
Time is a factor to consider when deciding whether to fill in your own tax return. Some tax returns may take just an hour or so if you have very straight forward tax affairs. Other situations need lots of information and can take a lot of time to complete. Leaving it to the very last minute to complete and submit a tax return runs the risk of being charged a penalty if you are late, even by just one day. You can complete either a paper tax return which has a deadline of 31st October, or complete the tax return online which has a deadline of 31st January.
There are advantages to completing your tax return online. You will receive an automated acknowledgement of your tax return, which you don’t get when you post a paper tax return. Tax is calculated for you if you complete a tax return online. The deadline is longer for completion of a return online, giving you more time to prepare and collect information. If you do your own tax return, remember to complete all the relevant pages, like employment pages or foreign income pages. Paper copies can be downloaded from the HMRC website, while online supplementary pages can be selected when you complete your online return.
There are a number of common errors that are made by people completing their own self assessment tax returns each year. Paper tax returns are often sent in to HMRC without being signed and dated. HMRC then have to send the tax returns back to the taxpayer to be signed and dated. Not completing all the relevant supplementary pages is another error which causes a delay with processing. The tax return which is completed has to be the return which corresponds with the correct year. For instance a tax return which has 2010-11 printed on the front should only be completed with details for 2010-11.
Missing the deadline for completion of a tax return will incur a £100 penalty. The deadlines are 31st October for a paper return and 31st January for filing online. If you receive a tax return after this date, you will have three months from the date of issue to complete the tax return.
Hiring an accountant or tax adviser to complete your tax return may be beneficial to some groups of people, especially if your tax affairs are complicated. If you are a pensioner, you may have different sources of income, including investment income which can be a complex area. Self employed individuals or partnerships have to complete tax returns with information about their personal income in addition to the business income. The completion of a tax return is time consuming in cases like this and outsourcing to a professional leaves you free to concentrate on other areas while knowing that the tax return will be completed accurately and in a timely manner. It is crucial to know which supplementary pages are required and to complete and submit them all before the filing deadline.