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Tax return deadline approaches

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Thursday October 18, 2012 at 6:41pm
It’s that time of year again and the 31 October deadline for submitting your paper tax return for 2011-12 is just around the corner. If you can’t make that deadline then you will have until 31 January 2013 to submit, but on-line only.

Late submission attracts an automatic penalty of £100 and there is no leeway. Even if you owe no tax, the fine will still be payable and an extra £10 is added to the fine every day until your return is submitted.

Aside from the fine, as the stakes can be so high for giving incomplete or wrong information, it has to be worth taking time early on to think about your tax return. Why?

It can’t be stressed enough how important a document your tax return is – at best you could be paying tax when you don’t need to. An accountant may actually save you money by pointing out where you can legitimately off-set tax owed.

At worst, getting it wrong can open up an HMRC tax investigation that may be costly to you in time and money on professional fees. You can take out insurance against any tax investigation you might face and at under £200 a year it would be money well spent.

Apparently around 1 in 10 tax returns have been investigated. HMRC has said it is looking in particular at special ‘groups’ which includes middle class professionals and those who are wealthy or affluent.

Although you may not consider yourself either of these things, media commentary this month suggests there may be some ambiguity as to how HMRC judge this. Will they take into account just income or include assets as well? If the latter, a lot of people with a respectable income and their own property could be included.

HMRC have sweeping powers to look into all aspects of your business and personal financial affairs. If a full investigation is launched, and it can be shown the errors got there innocently, HMRC can go back four years into your affairs and claim unpaid tax with interest plus penalties. If the error is down to you being careless with your return then you can expect them to go back six years. If suspected to be deliberately false, they can go back 20 years and in worst cases evaders go to prison.

This puts a tremendous responsibility on whoever completes your tax return, not least because it can be complicated especially the more involved your affairs, if you have multiple sources of income or are self-employed for example.

If you are ever contacted by HMRC about a tax enquiry you should seek advice from your accountant immediately. At Parkers we take charge of the HMRC enquiry and ensure your best interests are maintained.

Andy Parker
Chartered Accountant, Birmingham

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Parker Chartered Accountants and Financial Advisors is the trading name for Parker Business Development Ltd (Registered No. 4116664), Parker Tax and Trust Ltd (Registered No. 06950353) and Parker Financial Planning LLP (Registered No. OC347027). Parker Financial Planning LLP is authorised and regulated by the Financial Conduct Authority. All companies are registered in England and Wales – registered office contact details here