Self Assessment

Self Assessment
Your personal tax return


	The Tax Return Savings & investments Employment Shares schemes Self-employment Partnerships Land & Property Foreign Trusts etc Capital gains			Under self assessment, it is the individual taxpayer's responsibility to notify the Inland Revenue of any new source of income subject to Income Tax or Capital Gains Tax. There is a penalty for failing to notify your local tax office by 5th October following the end of the tax year in which the new income first arose. If you commence trading in business on your own, or you become a partner in a new or existing business, you must notify the Inland Revenue within 3 months of the end of the month in which you did so. There is a £100 fine for failing to do so. The Tax Collector will not accept the excuse that you were unaware of your obligations to declare any relevant taxable income and pay over the tax when due. The possibilities of late payment interest and automatic penalties (starting at £100) for late returns, should give you the incentive you need to contact an adviser if you are unsure of your position. If you are a company director, or you run your own business, then you would normally expect to receive a new self assessment tax return (Form SA 100) in the May following the end of the tax year. A random selection of the population are also selected each year and requested to complete a tax return. Key Dates The tax year always runs from the 6th April to the following 5th April. It is often referred to as the tax fiscal year. Under most circumstances you will receive a notification to complete a tax return, and be required to complete and deliver it back to the Inland Revenue by the January 31 in the following year. If you receive a tax return after the July 31, then you will have until the later of January 31, or three months from the date of issue, to file your return. It is always a good idea to prepare your tax return as soon as possible after the end of the tax year to which it relates. Most tax payers will make just two tax payments to the Inland Revenue a year, the second of which falls due for settlement by 31 July. In teh case of a business with falling profits, it may be in order to apply to have this second payment on account reduced to reflect the fact that less tax is will be payable. This election can only be made if the final tax liability for the year just ended has been fairly accurately calculated. The next deadline of interest is the 30th September. Many tax payers mistakenly believe you must file your return by this date. You don't. If the Inland Revenue receive your return before this date, they will calculate the tax due for you. A tax payer making a return after 30th September must include their own tax calculation. They still have until the following 31st January, however, to file their return. Company directors and employees can also elect to have any tax underpayments up to £2,000 collected by way of their PAYE code for next year. In order to qualify they must also submit their tax return by 30 September. The most important date for tax payers to take note of is the filing deadline of the 31 January following the end of the tax year to which the tax return relates. Failure to submit a tax return and/or pay anytax due by this date will inevitably lead to penalties and late payment interest.
	What you should do during 2003			The tax year (fiscal year) always ends with April 5. The current tax year is referred to as 2002/2003, and runs from the 6 April 2002 to the 5 April 2003. If you received a return this April, it is most likely to be the Tax Return for the year ended 5 April 2003 (sometimes referred to as the 'Year 2003 return'). This return covers the fiscal year 2002/2003. You must complete and file this return by 31 January 2004. If you have received a self assessment tax return for this year, please let us know as soon as possible. Since the 6 April 2001, if you have started a new business, or you now receive income from a new source, please advise us of the details. You also need to do the same if you have disposed of a chargeable asset (See Capital Gains). The first step is to keep all the relevant documents you will need to complete your tax return safe and in one place. These will include copies of P.60s and P11Ds if you are employed, notice of dividends and script issues if you hold company shares as investments, and of course certificates of interest received from all of your bank and buidling society accounts. We can think of nothiing more frustrating then to have to turn the house upside down looking for the missing documens you thought you had put somewhere safe. We recommend you file such documents in a single lever-arch file as soon as they arrive on your door-mat. Once filed, they can be forgootten until you have all the information you need to complete the tax return filing process. To the left, we have provided a brief review of the different kinds of income you must disclose in your tax return. Just click on the category you are interested in.
	A few do's and don'ts			You should never send original documents through the post. You are required to retain some of these documents for up to six years, and many will not be replaceable. To entrust the only copy you possess to the Post Office is tempting fate. The one exception is the tax return itself. It will only be accepted by the Inland Revenue if the return, or an approved substitute, bears the original signature of the taxpayer to whom it is addressed. It happens more often than the Inland Revenue care to admit, but it is possible for your tax return to get lost in their system. If your 2003 Return is not recorded as received by the filing date (most likely to be 31 January 2004), then the Revenue's computer system will automatically issue a penalty notice of £100. To avoid unnecessary complications, we suggest you consider the following options to provide proof of delivery: Hand-deliver the tax return to the named tax office and obtain a written receipt at the front desk. In the final weeks of January, some tax offices may stay open until 8:00pm on certain days, just to receive tax returns. If you are sending in your tax return by post, enclose a self addressed, pre-paid reply. Your tax office will normally send out a written confirmation that they have received your return, but this can take up to 8 weeks. By enclosing your own 'confirmation of receipt' you speed up the process. After mid-December we recommend you use registered post, enclosing a self addressed, pre-paid reply. File your tax return using the Revenue's electronic lodgment system (requires software). A word of caution: Putting the tax return in the post box, or even using registered post, is now unlikely to be accepted by the Inland Revenue as proof of delivery. Unless you receive an official written receipt, or the Inland Revenue confirm over the telephone that your tax return has been accepted, then you should assume that it has not reached them. Whether it has been lost in the post, or gone astray within the Revenue's processing system makes no difference to the end result. You will still receive a £100 penalty notice if you return is not on their system by the end of January 2004. If there is any doubt over whether your tax return has been received or not, play safe and deliver a second copy to your tax office. If you do so, make sure you state that it is a duplicate tax return of one that appears to have failed to reach them.