Tis the Season for Your Tax Return

December marks the penultimate month in which to file your 2014/15 self assessment tax return.

HM Revenue & Customs (HMRC) estimates around 11 million people are required to submit a 2014/15 tax return. Taxpayers will need to file their returns electronically by 31 January 2016 in order to avoid being issued with an automatic filing penalty.

To help you on your merry way with your tax return, we’ve compiled a list of common entries for tax returns completed by employees and the self-employed.

Common items on tax returns

The 2014/15 tax year runs from 6 April 2014 to 5 April 2015. Unless otherwise stated, the following information should cover this period.

• Employment income – dig out your P60/ P45- and P11D if applicable. Failing that, your final payslip for the tax year should have the information you need. If you can’t find that either, ask your employer for the figures
• Pension contributions – you should receive an annual statement from your pension provider. Avoid using the amounts on your bank statement as you may need to gross these up for the tax relief
• Donations – if you’ve made donations under the Gift Aid scheme, you should note these on your return
• Bank interest – even if it has been taxed at source, you should include it on your return and you should have received a tax certificate from your bank in around May with all the details you need
• Dividends – similarly, dividends need to be included even though they are taxed at source. If they have been reinvested, you will still need to include them. Dividend vouchers should have been sent to you around the time each dividend was paid
• Second homes – even if you’ve let your property to a family member at a discounted rent, you may need to disclose the income and expenses on your return. If you’ve sold a second property during the year, there may be capital gains tax to pay
• Other income – if you’ve been paid any 'cash in hand' or received any other taxable income that doesn’t fit into the boxes on the return, you may still need to disclose this – even if there is little to no paperwork to support it or its been paid in cash
• Employment expenses – if you are employed and have travelled business miles or incurred related expenses (such as tools, uniforms, travel expenses), you may be able to claim for them depending on their nature
• Professional fees and subscriptions – You can claim for fees or subscriptions you pay to some approved professional organisations – but only if that membership is a requirement of your job or it’s helpful for your work. You cannot claim back tax on fees or subscriptions you’ve paid to professional organisations not approved by HMRC. If you are self employed, you should also be able to claim for them in so far as they are incurred 'wholly and exclusively' for the purposes of the trade
• Use of home
  • For the employed – if you are required to work from home by your employer, you may be entitled to claim a deduction to cover the business element of your household expenses such as electricity, gas and phone. HMRC will generally accept claims for £4 a week without too much objection
  • For the self employed – if you are using your home as your office, you can offset a proportion of your household bills such as heat, electricity, council tax, water. Even if you only use your home for minor business use, HMRC will accept a reasonable estimate provided your claim is small and reflects your circumstances.

This list is by no means complete, but hopefully it will serve as an aide memoire.

Late Filing Penalties

If you are still not raring to go with your tax return, perhaps a reminder of the late filing penalties will persuade you:

An initial £100 penalty, which will apply even if there is less than £100 tax to pay or the tax due is paid on time

After 3 months, additional daily penalties of £10 per day – up to a maximum of £900

After 6 months, a further penalty of 5% of the tax due or £300 – whichever is greater

After 12 months, another 5% of the tax due or £300; whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due

Each of these penalties is in addition to one another, so a return filed a year late could face penalties of at least £1,600 – and this could escalate depending on the level of tax due.

Penalties are a waste of your hard-earned cash and you do not get tax relief for them either. 

Help is at hand

HMRC’s online filing system for tax returns calculates your tax liability for you. But needless to say, it will not check whether your figures are accurate or that you have claimed your full entitlement to expenses, reliefs and tax allowances. HMRC will penalise for any mistakes made whether you were aware of this or not. Ignorance is not bliss!

Your local TaxAssist Accountant would be happy to take care of all your tax affairs for you; from registration with HMRC, to completion of the return, to calculation of your tax liability and the due dates. You could be missing out on a tax refund without our expertise.

So don’t get the New Year off to a bad start by filing your tax return late and facing a late filing penalty.

Date published 4 Dec 2015

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.