Tax self-assessment online

For the self-employed, company owners or anyone who has to submit their tax return, 31 January is crunch time. If people don’t get their returns in before 31 January they’re liable for a £100 fine plus interest on any payment that remains outstanding.

Oh, and if anyone is submitting at this stage then they have to calculate how much tax they owe – Her Majesty’s Revenue and Customs (the current incarnation of what used to be the Inland Revenue and Customs and Excise) would have worked it out had it been submitted before 30 September.

If this looks like an area of concern, good. It’s something that needs attention and tax is a statutory obligation that needs to be taken seriously. It’s not, however, a reason to panic. The Government has made it possible to submit online for some years now – the calculation is automatic and there’s third-party software available to help even before then.

Easy tax?
The online tax return system is made by a company called EZGov and is compatible with all of the Government’s public systems. Why is this an advantage? Because people have more than one reason to get in touch with the Government electronically. If you have ever registered for a Government service online, then the same ID and key that got you through to that service will also work for the self-assessment system.

A lot of people now use the system, as the people at EZGov are keen to stress. Last year the figure reached two million and this year it’s widely predicted that three million will do the same thing; retention rates are good, with nine out of 10 people who self-assess online once doing it again the following year.

Early bird
The process is simple enough and the key is to start early. This is important because the Government will want to send out a password by post, as it’s deemed more secure than any other form of communication. A good place to start is www.hmrc.gov.uk/individuals/tmaself-assessment.shtml which offers a portal to information and assistance before you start to fill anything in. There is a separate section for self-employed people who have to fill in a supplementary form since they won’t be paying through the PAYE system.

Assuming someone has gone through the information and established whether they’re an employee or self-employed, they then move to the welcome page here and either register or enter their login and password.

Registration is straightforward but it needs to begin in time for delivery of login information, which will include an activation Pin. The site says this will arrive within seven days; common sense dictates that during January the demand will be higher than normal so it’s worth allowing extra time.

People wanting to self-assess online need their unique taxpayer reference number and either a national insurance number or a postcode to start off the process. The process itself is a simple matter of filling in the usual name and address details, creating a password, putting more details in, clicking to accept the terms and conditions, noting an ID then waiting for the Pin.