PLEASE NOTE: The charity TaxAid advises only those people on low incomes whose problems cannot be resolved with HMRC.

Completing your Tax Return – the basics

Help with your Tax Return guide

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Many people find the tax return form daunting. But most people actually only need to complete a small number of the boxes on the return. HMRC is encouraging people to file returns using the self assessment on-line system, but you may still file a paper return – though the filing date is earlier in the year (for the 2015-16 return it is 31 October 2016, compared to 31 January 2017 for on-line returns).

If you file on-line, you will be asked to choose which sections you need to complete. The appropriate pages will then be created for your return.

The basic paper tax return has 8 pages but HMRC may add extra pages for you to report particular kinds of income or gains, depending upon your own circumstances. For example, if you are self-employed, there should be an extra pages for information about your business income and expenses. If you have income from abroad, there are special ‘Foreign’ pages to complete.

If you submit a return on paper, it is up to you to ask for any extra sections you need. You can download a paper tax return and additional pages from here: https://www.gov.uk/self-assessment-forms-and-helpsheets.

If you have submitted a tax return on-line in the previous year, HMRC will not send you a paper tax return. If you have opted for digital communication with HMRC, you should be sent an email telling you to check your self assessment on-line account for a notice to file letter. Otherwise you should get a letter telling you to file a return.

If you normally file on paper, HMRC should send you a ‘notice to file a tax return’. This letter reminds you that you need to submit a tax return. If you want to file a paper tax return and have not been sent one, you will need to download a copy or phone HMRC.

Short tax returns

HMRC sometimes issue a ‘short tax return’ with only 4 pages to some people whose tax affairs are straightforward. You cannot ask for a short return and it is not available from the HMRC website.

If you have been sent a short tax return but it is not appropriate for your circumstances, you should ask HMRC for a full tax return. The short return might not be right for you if, for example, you are a company director, have foreign income, have received redundancy payments of over £30,000, have made capital gains or have complex tax affairs.

In such cases it is important that you ask for a full return, or you may be unable to declare all your income correctly and may pay the wrong amount of tax.

Each tax year runs from 6 April to the following 5 April. The tax return covering the year ended 5 April 2016 is sometimes called the ‘2016’ tax return’. The deadline for sending your completed tax return back to HMRC depends on whether you submit a paper return (31st October) or file it on-line (31st January).

The key steps to filling in the tax return are:

The main thing to remember is that you only need to complete the sections relevant to your personal circumstances.  The following sections will explain what records you will need, and what information you might need to put onto your tax return, how to calculate tax due and how to pay it and submit your return.

They are not a complete guide to filling in your tax return and you may need to take advice in your specific circumstances. In view of the size of penalties for mistakes and errors, it is important to take advice if there if there are items on your tax return about which you are not confident. If you take advice from HMRC it is a good idea to record the date, time and advice given, as well as the name of the person you spoke to.

General Anti Abuse Rule

There is now a General Anti Abuse Rule (GAAR). It applies from 17 July 2013. It is designed to prevent people exploiting shortcomings in the tax legislation or making ‘artificial’ arrangements in order to reduce their tax liabilities.

The wording is circumlocutory.  The guiding rule is that arrangements are not abusive unless ‘entering into {the arrangements} cannot reasonably be regarded as a reasonable course of action’. This is sometimes called the ‘double reasonableness test’.  In essence, what it means is that if a reasonable person would not think it was a reasonable course of action,  there could be a problem.

So before you file a return, it is a good idea to consider if there is any transaction during the tax year which HMRC might consider an abuse of the tax system.

There is detailed guidance on the HMRC pages of the Gov.uk website.