Tips for self assessment

Tips for self assessment






The great overriding tip is to treat filling in the tax return like you would an exam paper: read the questions properly.

You need to do a certain amount of preparation for this exam, primarily, assembling all your records such as your end of year pay certificate (P60) and benefits statement (P11D) from employment, details of dividends and interest receipts, records of letting income and expenses, private pension contribution records, freelance earnings - whatever is relevant.

You'll have the basic 10-page tax return to complete, with appropriate additional pages on top of that.

If you need further additional pages, contact your Tax Office or run off pages from the Revenue's website.

The tricky questions

Here are some tax return questions that you should treat with care:


You need to take care when entering the amounts of bank or building society interest you have received and any tax that has been deducted.
It is a common error for people to get confused about whether they have had tax deducted and fill in the wrong boxes. This can lead to the Revenue rejecting your form.


If you have received dividend payments, bear in mind that the cash dividend received comes with a 1/9th tax credit.
All three figures - the gross amount, the tax deducted (or tax credit) and the net cash received - need to be entered into the form. If you don't log all the figures you may not benefit from the tax relief on cash dividend payments.

If you have got a "scrip" or "stock" dividend (where you've taken shares instead of cash) take extra care. The figures for dividends taken as shares go into different boxes.


Don't try and enter income from ISAs or PEPs. Remember these investments are tax-free.

Don't assume all state benefits are taxable or non-taxable: taxable ones include the State Pension and Jobseekers Allowance; Child Benefit is an example of one that is not taxable.

Don't try and enter normal pension contributions or associated Additional Voluntary Contributions (AVCs) made to your employer's pension fund, because you will already have received tax relief through Pay as you earn (PAYE). But do put in details of personal pension payments to ensure you get tax relief. Unlike, workplace schemes, you will need to claim tax relief on personal pensions yourself.

Don't forget to list GiftAid payments and other charitable donations, putting in the amounts that you actually gave. Under GiftAid, higher rate taxpayers can claim tax back through self assessment.

If you're filling in the employment pages, do make sure the benefits that you list tie up to your P11D (Benefits Statement) and you make appropriate expense claims for things like business travel and professional subscriptions to ensure you are not over taxed on work-related expenses income.

Those completing the land and property pages for rental incomes need to make sure they've listed appropriate expenses and if it's a furnished let, think about claiming the 10% wear and tear allowance. A landlord claiming this allowance will pay tax on only £900 of a £1,000 monthly rental income, for example.
Help - I'm stuck!

This is an open book exam: if you get stuck, the Revenue's Tax Return Guide has a lot going for it.

You can contact the Revenue's helpline or your local office - or go to a professionally qualified tax adviser.

But do bear in mind that all these sources of help and support get busier as 31 January approaches.

You'll also have to work out your tax bill and make a suitable payment at 31 January; without this interest will start to run.

The calculation can get rather complex but if you can't get the exact answer, do estimate your tax bill, send in a payment on time and don't let the fact that you don't have a precise tax figure stop you sending in the return itself.

E-filing

One possibility is filing your return electronically. You'll need to register in good time through the Revenue's website - it's not something that you can start from scratch on 31 January and hope to complete that day.

The system leads you through appropriate sections of the form rather than showing you everything and helpfully calculates your tax bill. It's also much more robust than it was.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.