Electronic Self Assessment Filing

To date, the Internet service for filing self-assessment returns has not exactly been a resounding success. If you have still got a tax return to submit for 2002/03, is it worth doing it online?

Why do it electronically?

There are a number of benefits in filing electronically.

1. More time – if you use the Internet service, you have until December 30th to get the return in for the taxman to collect underpayments of up to £2000 via an adjustment to your tax code. With paper, you only get until September 30th.
2. Easier tax calculation – forget the long and complicated tax calculation workbook; the electronic option comes with automatic tax calculation.
3. Peace of mind – submit online and you get an acknowledgement of receipt so you know for certain that your return has been received.
4. Money back quicker – repayments are made faster when returns are calculated electronically.
5. Open all hours – the service is available 24 hours a day.
6. Knowing where you stand – online users can view their statements of account at any time.

Registered Users Only

What’s the catch? You obviously need a computer and an Internet connection and to go through the registration process and security system before you can begin to fill in the return. The taxman would have us believe that a complicated electronic tax return is just eight steps away. Go to http://www.inlandrevenue.gov.uk/activate - this is the registration page. Wait for postal confirmation of user ID and separate activation of your PIN. Once you’ve got these, go to the Taxman’s website, again follow the self-assessment link to the login/registration page, enter user ID and password and select ‘login’. Enter your activation PIN and select ‘activate’.

Tip 1. Allow sufficient time to get your user ID and activation PIN sent to you. This should take seven days, but allow a bit extra. Once activated, destroy the activation PIN letter. Remember to activate the service within 28 days of the date on the letter, or it is back to the beginning again.

Tip 2. Remember your user ID and password as these are needed each time.

But what about the return itself?

Come back to it. Once registered, the return must be completed. To do this you can either use the Taxman’s own free online tax return service or choose from the range of commercial software product available. It is not necessary to complete it all in one go. If the Taxman’s online service is used, the work automatically saved so you can go back to it at a later date. Once completed, the return should be checked carefully before finally submitting it. Once submitted, a confirmation receipt should be received via e-mail.

1. Remember to check the return carefully before hitting ‘submit’.
2. Run the calculation before submitting to make sure it gives a sensible answer – a silly result may bring a mistake in the return to light.
3. Print out a hard copy for future reference. You’ll probably find it easier to check a printed version than to check the return on the screen.
4. Keep the receipt as proof the return has been filed.

Paper. If you want to send additional documents a paper return might be better. But unless you try you won’t know. If going electronic doesn’t make things easier for you, stick to paper. Also use this option if there is an attachment you want to send in to make sure the Taxman has seen it.

If you use the Internet service and file by December 30th, the Taxman will collect underpayments through your tax code. However, you’ll still need to stick to paper if your return is complicated.