Eight top tax return tips!

by Serena Cowdy on 09 January 2010  |  12 comments
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Is Moira Stewart hiding in your cupboard under the stairs? Dispel your tax demons before it's too late!

HM Revenue & Customs (HMRC) recently issued a reminder to anyone who hasn't yet submitted their 2008-09 Self Assessment tax return form. In a nutshell, you need to have filed your return online, and paid any tax you owe, by January 31st.

Yup, that's by the end of this month. If you don't, you're likely to face a £100 fine. And that will be followed by further financial penalties the longer you leave it.

You've still got time to get the thing sorted; but you really do need to act NOW. And if you're not sure where to start, these eight trouble-shooting tips should help. I filed my own Self Assessment form last month - so hopefully you can learn from my mistakes!

1. Do this first!

If this is your first time using HMRC's Self Assessment Online service, you'll need to register. The registration process itself is quite quick and straightforward: Visit the Self Assessment section of the HMRC website and click 'Register for Self Assessment Online'.

Once you've registered, an Activation Code will be sent to you in the post. This may take up to seven days to arrive (assuming there are no postal strikes!) so it's really important you get this sorted straight away.

2. Do this second!

If you were employed (rather than self-employed) for any part of the tax year in question, you'll need to use your P45 or P60 to fill in sections of the Self Assessment form.

In our household, there seems to be some sort of black hole into which all P45/P60 forms go; I'm sure I've been sent them in the past, but I can never, ever find them when I need them.

If it turns out you don't have the relevant P45/P60, you'll have to contact your previous employer (usually the payroll department) and get the relevant information from them.

In my experience, this can be a very long-winded process, with replacement documentation trailing sluggishly through the post. So, it's not a good idea to start hunting for these documents the day before the deadline!

3. Everything is relevant

Filling in my Self Assessment form took about half an hour. Simple, right? Unfortunately, pulling together all the information I needed to include in that form took about three days. Virtually every piece of financial documentation you own somehow turns out to be relevant.

For example, I once naively ignored one dormant savings account on the basis it had only had 63p in it for the whole period. But of course that 63p was earning interest (albeit a minimal amount) so it had to be taken into account.

So, sort all your paperwork into manageable, date-ordered sections well in advance. Here's an HMRC guide to the basic records you should keep for Self Assessment purposes.

4. Hard copies help

If your invoices, bank statements and so on are stored electronically, you may find it useful to print off hard copies as well.

These papers can be laid out in front of you, clipped together in handy groupings and arranged in date order. That way, you won't need to scour electronic folders and files every time you need to find a piece of information.

5. Clear some space in your diary

Try to find a time to complete your return when kids or partners aren't around. In my experience, any distractions can make the process seem even more unmanageable!

Many people complete their tax returns during weekends. However, I find it easier to devote a couple of weekdays to it, when I've got the house to myself.

Another good reason to tackle your return during working hours is that all the people you might need to get in touch with (like that old payroll department) are actually sitting at their desks and able to take your slightly panicky call.

6. Clear some space on your desk

Give yourself plenty of physical, as well as mental room in which to complete those forms.

With each category of paperwork in its own pile (even if it's on the living room carpet) you're less likely to lose documents and get everything mixed up.

7. Learn from your mistakes

If your tax return is nightmarish this year, try to pinpoint why that is and approach next year's return armed with that knowledge.

For example, I discovered that many of the receipts in my 'expenses' folder were very vague, and looking back, I had no idea what they were actually for. I'll be making a note on each one from now on!

8. Need more help?

If you get stuck, HMRC Self Assessment assistance is available online here.

If you'd rather hear a human voice, you can call the Self Assessment helpline on 0845 9000 444. It's open seven days a week from 8am to 8pm.

For identification purposes, just make sure you have your Unique Taxpayer Reference (UTR) and your National Insurance number ready.

Good luck!

Get help from lovemoney.com

If you need a bit of help getting your finances sorted, you've come to the right place.

First, adopt this goal: Manage on a small budget

Next, watch this video: Make 2010 the year to save

And finally, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?