If you have never filed online, you can’t get started without an ‘activation code’, sent in the post by HMRC, which takes around seven days (it could be 10) to arrive
Anyone who is self-employed, receives rental or other income on which tax is due, or who makes capital gains over the annual exemption of £11,000 for 2014/15, will need to complete a return. People who receive child benefit and where the higher earner in the couple has income of over £50,000 are also affected. Don’t overlook the cash in hand from a sideline in eBay trading, playing in a band at weekends, or letting your spare room on Airbnb, as all this income is potentially taxable.
As HMRC move to a digital tax system it will become easier.They have just launched the new digital personal tax accounts. At present, the information shown is limited, but HMRC will be adding more services to the accounts over the coming years, which may, in future, reduce the need for annual tax return completion.”
In the meantime, here are 12 important points to remember when filing your tax return with HMRC:
1. Make sure you have all of the relevant documentation: employees and pensioners will need their P60s, employees may need P11Ds for details of any benefits in kind. You’ll also need details of any investment income outside an ISA. The self-employed and landlords will need more extensive records of their revenue and outgoings. If you are self-employed think about cash books, invoices, mileage records, receipts, bank statements, records of all sales and takings, purchases and expenses, and money put in to the business or taken out for personal use.
2. Gather details of any professional subscriptions that you paid in the year, which were not reimbursed by your employer.
3. If you have made pension contributions in the year, check whether you have had the full relief that you are entitled to.
4. Check your charitable donations under the gift aid scheme. Like personal pension contributions, gift aid donations may attract additional relief if you are liable to higher rate tax.
5. If you have outstanding student loans and you are self-employed, you may be required to make repayments via your tax return.
6. Have you got married or separated during the year? Income from jointly owned assets, such as rental profits, can sometimes be treated differently depending on whether the owners are married.
7.You can use provisional figures in your tax return if the final figure is not available, but it is important to provide the final figure as soon as possible. HMRC will charge penalties if the original return is considered to have been filed ‘carelessly’.
8. Even if you can’t finalise your tax return yet it’s a good idea to check roughly how much tax you are likely to need to pay by 31 January so that you can ensure your finances are in order. Any amounts paid late will attract interest charges – currently 3%. If payment is still outstanding after 30 days, a 5% late payment penalty may be charged.
9. Check and double check all of your details and ensure that you have accounted for everything. HMRC receives a lot of information directly from third parties, so if anything has been omitted, an enquiry may well be opened. Penalties for inaccuracies in tax returns are much harsher if HMRC spot them first, so it’s best to make sure that all bases have been covered.
10. Finally for those who filed 2013/14 returns, remember that the deadline to amend these is 31 January 2016, so if any provisional figures were included, or any mistakes were made, these should be corrected by this date.