Each year around the time of winter, millions of individuals have to go through the laborious task of filling in and completing their Self Assessment Tax Returns. For those of you who may have yet to tackle this task, a tax return is a form on which you document your personal income, claim your tax allowances and tax reliefs, as well as details of any capital gains. This will normally only have to be completed by you if:

Youre a sole trader
Youre a Company Director (excluding a not-for-profit Company Director),
You have rental or other income from property
You have other income which is not taxed before you receive it.
You have realised a capital gain.

Completing the process has now been made easier, with the ability to complete the form over the internet, which is vastly quicker and more convenient for many, and reduces the amount of paper involved in the process. Completing the assessment online also pushes the deadline back a couple of months, giving more time to fully complete the form. This task can be made even easier, as professional tax specialists can be employed to prepare Self Assessment Tax Returns, and they can deal with all the complicated affairs that are associated with the process. They can offer you expert advice on tax saving opportunities, as well as tax planning solutions.

Next I should elaborate on the deadlines for filing your Self Assessment Tax Returns and bring to your attention the penalties which would be incurred if you fail to meet these strict deadlines. Firstly, all paper returns sent via the post should reach the HMRC (HM Revenues and Customs) office by midnight on the 31st October, or the alternative is to complete the returns form online, by midnight on the 31st January.

If you are unfortunate enough to miss the deadline, then you will automatically be charged a 100 penalty. If you are part of a partnership, then this penalty is 100 per partner and if a Trust and Estate Tax Return is late there’s a 100 charge to the trust or estate, which is why its best to ensure that everything is correctly completed before the due deadlines. HMRC do accept reasonable explanations for missing the deadline, but you should try hard to ensure that this is not the case with you. Reasonable excuses may include significant health problems or loss of records by fire, but would not include PC failure, internet problems or ignorance of filing deadlines. Also note that changes to the penalty regime recently introduced mean that the likely penalties for failure to complete a return are expected to be harsher than in the past.

If HMRC find a minor mistake on your form, it can often be put right by a simple phone call. For example if you have paid more tax than is due, then you will be refunded the overpaid amount from the HMRC with an appropriate amount of interest. However, if major mistakes are found on your form, then you may have to pay a severe penalty as a consequence and deliberately fraudulent returns can result in a prison sentence. So to avoid such a situation, ensure you seek the advice and help of a professional tax specialist, and ensure everything is completed correctly.