It is normally about this time of year that we can expect Moira Stuart to appear on television (and the HMRC website) exhorting everyone to file their tax returns on time.
Last year saw a number of changes to self-assessment filing dates and rules, including a new deadline for submitting paper tax returns – 31 October after the end of the tax year.
To encourage taxpayers to file electronically, the previous filing date of 31 January was retained for ‘e-filers’ and HMRC tried to support those who made the transition from paper, for example by issuing a step-by-step guide to online filing.
However, if you file on paper after 31 October, or e-file after 31 January, you could be charged a late filing penalty.
There will still be many who, for various reasons, would prefer to submit a paper tax return. If you are one of them, and haven’t done so already, make sure you now start gathering the information you will need so that you have everything to hand when you come to complete the tax return.
The good news is that after the significant changes to the tax form last year very little has changed this year. But again those who are entitled to claim the married couple’s allowance (basically where you are married or in a civil partnership and one of you was born before 6 April 1935) will need to take care: the allowance is claimed by completing the boxes on page 3 of the separate ‘Additional information’ sheet. This can be easily missed.
Things to remember when filing your 2009 paper tax return are:
- The filing date for paper returns is 31 October 2009; after that date any paper return is deemed to be filed late. You cannot file a paper return late, then – in an attempt to escape the penalty – file again online.
- The date you have to pay any tax due is still 31 January 2010 (and you might also have to make your first payment on account for 2009/10 by that same date).
- Those who file paper returns after 31 October 2009 will incur a penalty of £100, but if all the tax you owe has been paid by 31 January 2010 the penalty will be reduced to NIL. However, this ‘capping’ rule is due to be phased out in favour of an automatic fixed penalty.
- If you are unable to e-file because of problems with HMRC’s online service and are forced to file a paper return to meet the 31 January deadline then you be able to appeal against the penalty on the grounds that you had a ‘reasonable excuse’ for missing the deadline. Details of how to make a ‘reasonable excuse’ claim can be found on HMRC’s website.
- If you file your paper return by 31 October 2009, HMRC guarantee to calculate your tax liability and advise you in time to pay it by 31 January 2010.
- If you have underpaid tax, and your income is taxed under PAYE, you can opt to have the underpayment collected through your 2010-11 coding if your paper return is filed by 31 October 2009, and the underpayment is no more than £2,000.
HMRC offer free software on their website for most who feel confident to file online and have access to a computer and the internet – the exception being partnership returns (see below). The main benefits, apart from the later filing date, are that you get an instant confirmation that the return has been received, an immediate calculation of the tax payable is available, and if you are due a refund of tax this is likely to be received quicker.
HMRC offer several sources of help but you should not leave it too late to register as it will take several days before you receive the authorisation code which enables you to get started.
Word of warning for partnerships!
Last year there was little publicity by HMRC of the fact that if you wanted to file your partnership return online you would need to buy commercial software. HMRC software is only able to accept information for the partnership pages in individuals’ tax returns and there is no facility to file the separate partnership return using their software.
Many who were intending to file online only found this out after the paper filing date had passed. They therefore became liable to fixed penalties of £100 per partner for filing a paper return, unless they were prepared to go out and buy special software.
A list of commercial software providers is given on the HMRC website.
Our own website gives further guidance generally on self assessment.
Contact: Jan Tish (0844 579 6700 Fax 0844 579 6701)