Tax planning in depth

Ten steps to a successful tax return

Personal Finance and Savings

1 Read the documents thoroughly

Now is not the time to start practicing your speed-reading skills. Treat the return like an exam paper. Like in an exam, errors frequently arise from not reading the questions properly. The Revenue wants to know the answer to the question it has asked you, not what you think it should have asked you.

2 Assemble your documents

You’ve been sent a “core” return and some colour-coded supplementary pages that deal with different types of income. Check in the guide to establish you have the correct ones. If you need extra pages, or you’ve misplaced the form, call the Self-Assessment Orderline on 0845 900 0404 and get them sent to you. Gather together your P60, P11D, accounts if you’re self-employed, invoices for earnings, expenses receipts, dividend vouchers for shares, etc. Plus whatever you need for the supplementary pages. For example if you rent out a property, you’ll need records of rents charged and expenses occurred.

Get a free copy of your credit file here

3 Make a cup of tea

And have some biscuits as well - you know it makes sense.

4 Start filling in the form

If you follow the guide on the first few pages of your return and have this article to hand, it should see you through. A tip: fill in all the supplementary pages first, so you can transfer the final numbers to your core return. Step one of the guide has nine separate questions that will tell you which parts of the return you need to fill in. Remember: you don’t necessarily have to fill in every page.

5 Don’t be a hero – get help!

To the novice, the form is daunting. If you need help, contact the Self-Assessment team at your tax office (the telephone number will be at the top of your form).

When the office is closed at evenings and weekends, call the helpline on 0845 9000 444; all calls are charged at local rates. You can even visit your local tax office in person. However, don’t turn up at your tax office with a blank return and a carrier bag stuffed with receipts. Contrary to what you might think, the Inland Revenue is happy to help people who are genuinely stuck, but it likes to see some evidence that you’ve made an effort.

6 Calculating your tax

You’ve left it too late for the Revenue to calculate your tax (if you're reading this in October, then you have), so you’ll have to calculate your own. If you take it slowly and logically, it’s not as bad as it looks. If you’re not sure, compare the figure on the return with the figure on last year’s and this should give you a rough guide to see whether or not you’ve made a horrendous mistake.

Get yourself a new ISA for the new tax year

7 Take your time

The deadline may be pressing, but don’t be tempted to rush. Don’t fill in the return like it’s some form of speed trial. Read and re-read anything you don’t understand out loud. Repetition can often provide clarity.

8 Check it through

Just like an exam paper, you should read through your effort before submitting it. Does it stack up? Does it make sense? Add up all the figures for a final time and make sure the relevant figures are in the right boxes. To avoid an obvious mistake, remember that net plus tax equals gross.

9 Don’t forget to sign the form

This is the most common reason why returns are returned. If you’re too close to the deadline, that signature could cost you £100.

10 Prepare yourself for next year

The earlier you complete your tax return, the less hassle it will be and the more time you’ll have to sort out any problems. You can make your life a lot easier by organising your records properly. The Inland Revenue recommends that you set up a system for keeping tax records, maintaining it throughout the year and keeping it for as long as possible.

You don’t need an elaborate cross-referenced system. Most people just need a big cardboard folder they can slot documents into in the order they acquire them. This saves sorting through it all three weeks before deadline and it cuts down on the stress considerably.

Get an ISA from Alliance & Leicester