THE CLOCK is ticking if you have to submit a self-assessment tax return, as the deadline expires at midnight on Wednesday, January 31.
Do not leave it until the last minute because gathering the necessary information could take several weeks.
Around 11 million people need to submit a return for the 2016/17 tax year, covering the period between April 6, 2016 and April 5, 2017.
The deadline for submitting a paper application expired on October 31, 2017, so you must do it online at Hmrc.gov.uk.
Give yourself even more time if you have not done this before. Last year 840,000 people missed the deadline and were slapped with an automatic £100 fine, with penalties for any further delays.
If you need to take action, do it now.
HIT RETURN If you did not submit a self-assessment tax return last year you probably do not need to do so now, unless your income sources have changed.
However, Royal London personal finance specialist Helen Morrissey says some may have to fill in a self-assessment form even if they do not owe any tax: “If you get an email or letter from HMRC telling you to send a return, you must do it.”
You will need to complete a return if you earned £10,000 or more from savings or investments or £10,000 from dividends, unless they were held in a tax-free Isa.
You may also need to act if you earned more than £2,500 from renting out a property, or owe capital gains tax after selling shares or a second home.
If you are self-employed, a company director (except for a charity or non-profit organisation) or earned taxable income from overseas, again, you have to complete a return.
Also, if your taxable income was more than £100,000, or you or your partner earned more than £50,000 and one of you claimed child benefit, you must file a return.
If HMRC sent you a P800 saying you did not pay enough tax last year you must complete a return, unless you made a voluntary payment or your tax code was adjusted.
TIGHT DEADLINE Morrissey says the taxman will not be sympathetic if you missed the deadline because you did not give yourself enough time, and that you will not escape a fine on those grounds: “People do not realise how long seeking tax references or collecting the necessary paperwork can take.”
Many first timers leave it too late to get set up on HMRC’s online tax systems via the Government Gateway service at Gov.uk.
“Enrolling with HMRC and ordering your unique tax reference (UTR) can take up to 10 working days. Many people wait until the last minute and miss the deadline,” she says.
Last-minute tax returns face another risk.
“HMRC’s website gets very busy in the final days before the deadline and is prone to crashing,” Morrissey adds.
Dawn Register, tax partner at accountancy firm BDO, suggests that people get all their relevant papers to hand before they start filling in the online forms: “So round up your bank statements, expense receipts, employment income and any self-employment records.”
Remember to include your pension details.
She adds: “This includes state pension, the additional state pension, private pensions and those you inherit when someone dies.”
Do not forget to claim all the deductions you are entitled to, including gift aid on your charity contributions: “This may include annual subscriptions, say, to museums and zoos.”
Check all numbers thoroughly before pressing submit. “Beware simple errors. An extra zero can make a big difference,” Register says.
Tax is complicated, so she advises keeping it as simple as you can: “You do not need to report tax-free sources of income such as Isas, premium bonds, lottery wins, gambling winnings and the occasional eBay sale.”
If your affairs are complicated then seek advice from an accountant or chartered tax adviser.
She adds: “Remember, tax rules can be illogical and counter-intuitive.”