Why Online Tax Returns?

If you only have one job and receive no income from anywhere else you will probably never need to fill out a tax return. If you are required to complete one, the HMRC will normally send you a notice to complete your tax return. It is important to remember that if you realise that you need one and HMRC haven’t notified you then it is your responsibility to ask for it. The main reasons why Self Assessment may apply to you are listed below:

• You’re self employed
• You’re a company director
• You’re a minister of religion
• You have income from letting any property or land you own
• You receive other untaxed income, or significant capital gains, and the tax due on it cannot be collected        through a PAYE tax code
• You’re a member of Lloyd’s of London insurance and reinsurance market
• You receive annual income from a trust or settlement, or any income from the estate of a deceased person,  and further tax is due on that income
• You have taxable foreign income, even if you are claiming that you are not normally resident in the UK.

Before you start to complete your online tax return you will need to gather all the paperwork you will need. It will be very frustrating to get half way through the form only to realise that you do not have a crucial bit of data. Aside from this, it is actually a legal requirement to keep your paperwork up to date. You must keep records of your income for at least 22 months after the end of the tax year. If you are in business and self-employed as a sole trader or partner, or have rental income you are required to keep records for at least 5 years and 10 months after the end of the tax year. You will need to have the following information to hand when completing your online tax return:

• Your P60
• Details of any pay and taxable expenses and benefits received from your employer
• Bank and building society statements
• Cheque and paying-in book stubs
• Any dividend vouchers you have
• Your self-employment accounts
• Documentation about any capital gains that have been realised
• Information on other income including investments, savings, pensions, property or benefits you receive
• Paperwork on anything you can claim for, like self-employed expenses or charitable donations.

Each year the amount of people choosing to fill in their tax return electronically is increasing and there are many benefits to completing your tax return this way. There is no hassle with paperwork and you do run the risk of it going missing in the post. You will receive and immediate acknowledgement of receipt so you can relax in the knowledge that it has arrived safely. You can also buy yourself an extra 3 months as you have a deadline of January 31st. You can also save the form as you go along meaning that you do not have to complete the whole thing in one sitting. The HMRC will automatically calculate your tax for you and if you are due a refund you are more likely get it quicker as your form will be processed sooner!

Important Advices for Tax Accountants

Tax accountants can help you to prepare your taxable accounts for HMRC and they will also be able to help you to calculate the amount of tax you will need to pay and will also certify that their calculations are correct. If you are looking for general advice on tax and tax accountants then you can contact your local HMRC office where they will have details of all HMRC tax and specialist advice offices.

Under the requirements of self-assessment it is now a legal requirement to keep all records of your income and expenditure when you are not a full time employee. For example, a designer could be self employed but also have a part time job. If you are sent a tax return by HMRX then it is a legal request and you must file a return. If you do not do this you are liable to face penalties from HMRC. If you think because you haven’t been sent a tax return you don’t need to submit one then you need to think again. Even if HMRC have not sent you one there are various reasons why you would still need to submit one.

If you have not received a tax return and may still need to file one then anything on the list below are applicable:

• You are self-employed or a partner in a partnership
• You have received dividends that take you into the higher rate tax band (refer to our Tax Centre for the latest rates )
• You receive rental income
• Income from untaxed savings (excluding ISAs)
• You have received any other type of income that has yet been undeclared, e.g. after dinner speaking, consultancy work, online trading
• You have a capital gain, e.g. you have sold a second property, sold shares
Some other reasons why you may need to file a tax return, and where you could potentially receive a tax rebate or saving are:

• You receive a mileage allowance from your employers that is less than the tax free mileage allowance (2010/11 – 40p for the first 10,000 miles, >10,000 miles 25p)
• You made pension contributions, but are a higher rate tax payer
• You have paid for certain expenses or professional subscriptions that haven’t been reimbursed by your employer • You have made a capital loss
• Your PAYE code hasn’t been applied correctly, perhaps you have multiple jobs, or only worked for part of a tax year

Preparing a tax return can be a stressful and time consuming process and if you find you are not clear on something then it is best to consult with tax accountants who will be able to offer you professional advice. By doing this you can minimise the stress involved and could even find that you are able to make even more tax savings.

IT Contractor Accountants Can Offer you Specialised Advice

Professional IT contractor accountants can advise you on the best way to handle your contractor finances so that you can get the maximum return. They do this by using their vast experience and knowledge of relevant legislations and regulations. As an IT contractor you may not have this knowledge and acquiring this knowledge takes time and rather than missing out on opportunities in paid IT contract work trying to gain this knowledge, using the services of professional IT contractor accountants is likely to save you time and money in the long run.

IT contractor accountants can offer you specialised advice on something that is really a specialist area. Having a good accountant look after your accounts will ensure that you are not paying too much tax and they should also be able to offer you a personal service and be available to offer advice and answer any questions you may have. The service they offer should include calculating your PAYE and NIC’s, quarterly VAT return, prepare your year-end accounts, complete your annual return and also calculate your corporation tax liabilities. They can also liaise directly with HMRC on your behalf and advise you on IR35 and S660 issues.

Before you hire the services of an IT contractor accountant you need to work out exactly what your business needs. Your contractor accountant should be an asset to your business as they can advise you on legislation that may affect your company as well as saving you time and money. Finding an accountant that can make this side of your business as painless as possible is definitely money well spent and will hopefully turn into a long standing business relationship.

Below is a list of things you should take into consideration before you hire the services of a contractor accountant:

• What professional bodies are they regulated by and what qualifications and accreditations do they hold?
• Are they specialists in the contracting market? How much experience in this market can they demonstrate?
• What do their services cost? What’s included and what’s not?
• Are there any ‘extras’ you may have to pay more for? What about self-assessment returns?
• How and when will you pay your accountancy fees?
• Who will look after you on a day-to-day basis? How often will they keep in touch with you?
• What are their average response times (to your queries)? Will you have unlimited support?
• What other knowledge (e.g. tax saving advice) and services (will they set up a company for you?) to assist your business are provided as part of the fee?
• What are your responsibilities?

Remember that any accountancy fees you have to pay should be a fixed monthly amount and this fee should cover a comprehensive accountancy service. You will need to shop around as the fees will vary with each company so you will need to compare the services on offer.