Do your taxes online

The end of September is coming, and that can mean only one thing ­ it’s time to get the tax return in order.

It is an important deadline for people who want to keep their tax affairs on paper, and who also want Her Majesty’s Revenue and Customs (HMRC) to calculate their tax liability for them.

If you use your computer, though, this deadline goes away. Using either a program on your PC or HMRC’s website, your PC ­ or HMRC’s computers ­ will calculate the tax you need to pay automatically. That gives you until 31 January to file a return.

Preparing your return
There are some things in a tax return that fall outside the remit of this magazine, so they’ll be mentioned only briefly, but they are vital. These include organising your records in the first place, and understanding what’s tax-deductable and what’s not. HMRC’s site will help with this, as will an accountant if you are in any doubt.

As a rough outline ­ and this is not intended as a substitute for proper advice from a qualified professional ­ self-employed people may claim any expenses they legitimately incur as part of their work
and set them against their income, ending up taxed on profits only.

Everyone else has their tax entitlements, whether ISAs, pension contributions or other items, and there is space on the form to list these. If you want to claim an expense against tax you will need a receipt. A receipt doesn’t have to be sent in with the return, but should an HMRC inspector wish to do a spot check, it had better be available. Company owners will have dividends rather than a salary, so their tax will be different from people on PAYE. Property owners with an income from tenants have different rules again, but can still complete a tax assessment over the internet.

Whatever category you are in, the next thing to consider is savings. Banks and building societies will send an annual statement of what people have invest ed and what they have paid already in terms of tax. Have these handy as the information needs to go onto the form in order to avoid paying tax twice on the same income.

Keeping it in the family
The online tax return system is made by a company called EZGov and is compatible with all of the Government’s public systems. This is important to individuals as they may have more than one reason to get in touch with the Government electronically.

It’s important to remember that if someone has ever registered for a Government service online the same ID and key that got them through to that service should also work for the self-assessment system, so there is no need to register again.

The process is simple enough and the key is to start early.Online submissions can be sent in any time up until 31 January, but that’s no excuse not to get started. People who have not registered before will need to wait for the Post Office to deliver their registration details, so if you haven’t filed online before then leaving it until the last minute is not viable.

Like this story? Spread the news by clicking below:

 del.icio.us     Digg this     reddit!