If you are one of the 7 million or so UK Tax payers that are required to complete a self assessment tax return each year then this page may give you some assistance in completing this not so interesting task.
The UK tax year runs from 6th April to 5th April each year and anyone who is required to complete a self assessment return must disclose all of their taxable income for this period.
The majority of UK tax payers have their tax collected at source through the Pay as You Earn Scheme, whereby employers run a payroll scheme that deducts the correct amount of tax and national insurance each month. The employer is then legally obliged to pay this amount over to HMRC every month or every three months depending upon their size.
This is the easiest and most efficient way of collecting tax; however it only works when the tax payers has full time employment and recovers the tax that is due through this employment. PAYE schemes do not and cannot recover tax that is due on income from other sources. This is where the Self Assessment Tax Return is required, it has a main tax return and up to 11 subsections to cover every eventuality of income that could be obtained and tax payable upon., below are the most common reasons why a tax payer would be required to complete a self assessment tax return
- · They have Income above £2,500 from Land or Property
- · They are a Company Director or If you are self employed
- · They have Income from a pension and a salary
- · They are a 40% income tax payer and have savings income
- · They receive income from investments that are not taxed at source
- · They receive Income from foreign sources
- · They have income subject to capital gains tax
There are also various reliefs that can be claimed and again these are included in the tax return.
It is possible to collect all the data that is required and submit your own tax return online through the HMRC website, although this is not the easiest way of doing things it does have the advantage of being free.
The other way of getting this annual chore out of the way is to outsource it to a specialist who deals with self assessment tax returns, these specialists are often fully qualified accountants who choose to deal with personal tax affairs rather than general accountancy, they can provide excellent value for money compared to the traditional high street accountants who charge up to 4 times the amount of an online specialist.
The tax return accountant will probably provide you with an end of year checklist to ensure that you do not miss anything of importance and will also ensure that you claim all the allowances that you are entitled to, this can be very helpful if you are a landlord and have property income as it is a specialist area and nor everyone who has buy to let income has the knowledge, nor wishes to acquire the knowledge of what is and is not allowable against rental income.
Once all the income has been disclosed on the return, the tax return account will calculate the amount of tax that is due, discuss the return with you the client and submit the return online on your behalf. The online returns must be submitted by 31 January following the end of the tax year to which they relate.
Online tax return accountants provide value for money and take away the strain of the annual tax return. Enter the search term on your favourite search engine and see what a difference a little bit of professional help can make.