Do your taxes online

First, it’s worth looking at what’s on the HMRC website. The site contains a great deal more than simply this year’s tax return. If someone is in arrears or has missed a year, they can go to www.hmrc.gov.uk/individuals/tmaself-assessment.shtml.

Once there, click on Self Assessment Forms, Notes and Helpsheets. Here there are not only downloadable versions of the current tax forms, but also every previous year dating back to 1996/7.

Most people won’t need this, but for the few who do, having the forms on tap should make life a lot more tolerable.

The rest of the website has been updated significantly and there is a lot of advice and help for people wanting to find out about the procedure before they commit themselves to it. The website www.hmrc.gov.uk/sa/sevens.htm is a simple seven-step guide to self-assessment. Here’s that list:

1. Get all your tax records together.
2. Decide whether to assess online and register for the service.
3. Take a note of the deadlines ­ 30 September for hard copy, or 30 December if you’re going to owe less than £2,000 and you want to pay it through your PAYE scheme with your employer (31 January if you want to pay in two lumps).
4. Check that all the necessary pages are present.
5. Read the tax return guide (available in PDF form from HMRC).
6. Where to go for help within HMRC.
7. Checking of tax returns.

Do it yourself
HMRC is pushing the idea of self-assessment quite heavily. It is cheaper for them to administer and, in fairness, if the self-assessor gets the details right it’s a much more straightforward process to go through than filling the form in and waiting for the assessment to come through by post. It can be worth looking at other sites for their thoughts on tax and the best way to submit a return.

Business Link has an article at http://tinyurl.com/28349s, which advocates going online in clear terms; as a Government-backed body this might be expected. The same site has advice on self-assessment for self-employed people, for company directors and other categories of tax payers who will have differing obligations and needs.

Third-party services, such as Self Assessment Online, aim to simplify the process even further by effectively t urning the form-filling into a question and answer session online much like the third-party software packages that do the same thing on a PC. Clearly anyone entering their confidential tax data onto a website run by a third party needs to be confident that it is secure and that confidentiality will be maintained at all times.

Taking the plunge
Once you’ve decided to take the plunge, it all gets a lot easier. Completing an assessment online is the Government’s recommended means of submitting a return, as the calculation is instantaneous and if money is owed from HMRC, it will be paid more quickly than through a paper return. If you’ve ever had to wait for a cheque to the Revenue, this last bit of information should be music to your ears.

Let’s assume the registration is complete. A good place to start on the actual submission is www.hmrc.gov.uk/individuals/tmaself-assessment.shtml, which offers links to information and assistance before anyone starts to fill anything in. This draws the important distinction between people who are employed by someone else and who will therefore be on the Pay As You Earn system (PAYE) and the self-employed, who will pay one lump in January and another in June.

January will be the larger payment as it includes payment for the assessed year plus payment on account for the next tax year, while the July payment is just a payment on account for the next tax year (a balancing payment is included in the following January payment).