A tax return can be filed online using HMRC’s self-assessment online service. However, before an individual can file a return in this way, he or she must be registered to use the service.
The registration process is straightforward. The first stage is to select `self-assessment’ from the `do it online menu’ on the HMRC home page (www.hmrc.gov.uk). It is then simply a case opting to register by clicking on the `register’ button and following the steps:
An individual will need his or her unique taxpayer reference, which is the ten-digit number that can be found on his or her tax return or notice to complete a tax return, and either his or her National Insurance number or postcode
The enrolment process requires the user to create a password, note a user ID and supply some details. Once this has been done, the user will be sent an activation PIN through the post.
This must be entered within 28 days to switch the service on. If this timescale is not met, the PIN lapses and it is necessary to start the enrolment process all over again
Once the service has been activated it can be accessed from the HMRC website using the user ID and password.
There are a range of software options that can be used to file a self-assessment tax return over the internet. Individuals can either use HMRC’s free online returns and forms service, which is suitable for most straightforward returns. The free service can be used to send in the main self-assessment tax return (SA100) and also the following supplementary pages:
individual’s share of partnership profits and losses;
capital gains; and
As the free HMRC online forms and returns service is limited to the supplementary pages listed above, individuals with more complicated tax affairs who need to file additional supplementary pages will need to use third party software.
There is a variety of third party software available, some of which is free but most of which is supplied by commercial software providers. HMRC produce a list of third party software that is compatible with their self-assessment online service. The list is available on the HMRC website at www.hmrc.gov.uk/efiling/sa-efiling/soft-dev.htm
Third party products allow a wider range of forms and supplementary pages to be filed online. As well as the individual tax return (SA100), they can be used to file the partnership tax return (SA800) and the trust and estate tax return (SA900).
Third party software products also support online filing of the following supplementary pages:
capital gains tax;
ministers of religion; and
Filing the return online offers a number of additional benefits over filing a paper return, not least in that the service automatically provides tax.
Using Self-Assessment Online
There are various sources of help available to assist individuals in completing and filing self-assessment tax returns online. The online service contains help icons throughout which provide answers to particular problems. The HMRC website also contains a demonstration of how the service works.
This is available at www.hmrc.gov.uk/demo/index.html. As the demonstration shows, the service allows the user to tailor his or her return to ensure that the correct pages are completed to reflect the nature of the user’s income. The user is asked a series of questions about his or her circumstances, the responses to dictate the specification of the form. Some of the information pre-populated from information held by HMRC, such as any adjustment to the tax code to collect underpayments of tax for a previous year.
It is not necessary to complete the return in one go. Information can be entered and saved and the return can be revisited at a later date. This is useful if all the information is not available in one go.
Once the return is completed and the individual is happy that it is correct, the return can be filed. It is prudent to do this before 31 January deadline so that any errors which come to light on submission can be corrected. Once the return has been filed the user will receive a submission receipt confirming the return has been submitted and the date and time. The submission receipt contains a unique submission reference.
The self assessment online service also enables the user to view his or her account and to see what payments are due. The service can also be used to request that a repayment is made or to reduce a payment on account.
HMRC also provide help on using the self-assessment online services by means of a series of step-by-step guides, which are available to download from the HMRC website at www.hmrc.gov.uk/sa/help-using-online.htm#4. Help can also be obtained from various helplines, the numbers for which are also available on the HMRC website.
Failure to File Online
Anyone who wishes to file a paper tax return must do so by 31 October following the end of the tax year to which it relates. If this deadline is missed, the tax return must be filed online. If a paper return is filed after 31 October, a penalty of £100 is charged. However, HMRC have stated that for this year, provided that the return is filed by 31 January and the tax is paid on time, the penalty will not be charged.
If the return is filed online by 31 December following the tax year to which it relates, tax may be collected via an adjustment to the employee’s tax code if the amount owed is £2,000 or less.
The return must be filed no later than 31 January after the end of the tax year to which it relates. Any outstanding tax for that year must be paid by that date, as well as first payment on account for the current tax year. If the notice to file a tax return was not received until after 31 October, the return must be filed within three months from the date of the notice. If the tax return is filed late, a penalty of £100 is charged.
Moving to Online Filing
Those who have missed the 31 October deadline for paper returns are faced with the choice of filing online or paying a £100 penalty. As many people do not do their tax returns until after 31 October, they are effectively being forced to file online.
The online system is relatively straightforward to use. However, some degree of forward planning is essential and it is vital that registration to use the service is made in good time. It is no use remembering on 28 January that you need to do your tax return and expecting to be able to file online if you haven’t already registered.
Those that do not have access to the internet are not exempt from the requirement to file online as they can use an agent to file on their behalf. Again, it is necessary to register first.