Self Assessment Tax Returns - Some Useful Thoughts
Every year, the filing date for self assessment tax returns for UK individuals raises discussions, statistics and debate – as well as the usual last minute rush of trying to get matters concluded by the deadline of 31 January. Every year, returns are late with penalties and interest to follow.
Based on last year's returns, there are some interesting statistics available including:
Men are more likely to file their returns on time than women – for every 10,000 tax returns submitted by men, only 232 were late whereas for women, 235 tax returns were late for every 10,000 submitted.
Younger people are also more likely to submit late tax returns than their elders. For every 10,000 tax returns submitted by over 65s, only 104 of these were late compared with 18 -20 year olds where 833 were late for every 10,000 submitted.
There are also differences on a regional basis where tax payers in Northern Ireland are the most likely to file on time with 178 returns being late for every 10,000 submitted. The comparable figures are 205 late returns in Wales and 233 late returns in both Scotland and England.
Perhaps the most surprising statistic is that accountants and lawyers are not the best group when it comes to filing – they file 106 late returns for every 10,000 submitted.
The winners in this department are those working in agriculture, fishing and forestry where only 62 late returns were filed for every 10,000 submitted.
Tips for Tax Return Preparation
The last minute rush of completing and submitting tax returns can lead to mistakes which, in turn, can lead to fines, interest, penalties or even paying too much tax.
A couple of tips to help could include the following:
Set up a tax file
A simple box could be put to one side where paperwork relevant to your tax return during the year is put in it.
Similarly, setting up a sub-folder in your email inbox entitled "tax return" could help so that relevant emails can be easily located when it comes round to preparing your return.
There are numerous applications which can be used such as "itap receipts" which will take photographs of receipts for business expenses which can then be stored for future reference.
This will also help with the government's drive to make tax digital in the future.
There are allowances which were brought in in April 2016 where basic rate tax payers have been able to earn up to £1,000 in interest on savings before paying tax.
Making use of these allowances may mean that entries do not need to be made on the respective tax returns.
As with every year, no matter how much advance notice is given, people will still leave it until the last minute which can lead to errors.
Being the month where many people make new years resolutions – maybe it's the time to ensure that your tax return for the year ended 5 April 2017 is not left until 31 January 2018.