No excuses get that tax form finished; The self-assessment deadline

IT is bad enough that the Inland Revenue has lost thousands of self-assessment forms. What is far worse is that, if yours is among them, you could be forced to pay a painful price for the taxman's incompetence.

The Revenue cannot necessarily be sure which forms it has lost and which were simply not submitted on time. Therefore you could still be fined for non-payment - and be charged interest and other penalties, which can soon clock up to hundreds of pounds.

Meanwhile the deadline is looming by which you must post your cheque. By January 31 you must pay any tax still owing for the year ending April 5, 2002 - plus the first instalment of tax for the year ending April 5, 2003.

This is also the date by which final returns for the tax year ending April 2002 must be filed. But if you wanted the Revenue to calculate your tax bill for the last tax year, then you needed to have filed by September 30. So anyone who did file and has not received a tax bill should be worried. There is a good chance their return is among the forms that have gone astray.

If you find yourself in this unfortunate position, you have less than two weeks to resubmit your return and work out your tax liabilities. Otherwise you may find yourself fined (pounds) 100 - and be subject to 6.5% interest on any amount owing. If you have still not paid up by the end of February, there will be a further 5% surcharge.

John Whiting, a partner at accountants PricewaterhouseCoopers, says: "The bottom line is that everyone is technically liable to pay their tax bill by January 31, and if they fail to do so, whatever the circumstance, then they will face fines and penalties.

"You can try and get into long rows with the Revenue about whose fault it was that they didn't have the form, but in the long run the easiest thing to do is simply pay up."

But if you're not an accountant then knowing how much to pay is far from easy. If you are in any doubt, Whiting recommends calling your tax office.

"If you filed before the September deadline and have not heard anything, then I suggest you call your tax office urgently because there is a good chance something is wrong and your form may well have gone astray," he says. "If it emerges that your form has been lost, then you should ask them how much you need to pay."

If you have kept a copy of your form - as everyone is advised to do - you will have the basic information at your fingertips. "Make them do the sums for you," says Whiting.

Failure to pay up will cost you dearly. If, for example, you have a rough idea that you owe the taxman (pounds) 5000, do nothing for the next six weeks and that bill will shoot up by (pounds) 400.

Those who owe small sums have less to panic about. And if you normally pay tax throughout the year by PAYE (Pay As You Earn), you will probably only have to fill in a self-assessment form if you have other earnings such as freelance income or investments.

The taxman also needs to know about your bank and building society interest - but not if it is earned through tax-free wrappers such as Tessas, personal equity plans (Peps) or individual savings accounts (Isas).

Pensioners often need to complete self-assessment forms because all their income - including their company or private pensions, state pensions and investment income - is liable to tax. But the biggest bills are faced by the self-employed, freelance or subcontracted workers.

If you fall in to one of these categories and you failed to file by September, you will now have to work out your tax bill yourself by assessing your income, deducting expenses and then offsetting personal allowances and so forth.

It is still possible to get the Revenue to do the sums for you if you submit your form electronically via its website, but time is getting tight. It takes a couple of days for log-ons and passwords to come through, and simple deadline pressures might make things difficult for you. But the website could still be a possibility for anyone who doesn't mind staying up all night.

If you can't get round to submitting a tax return or doing it online, then guess what you owe the taxman and send in a cheque. The Revenue will sort things out if it's too much, so you've nothing to lose.

What the taxman really hates is people who do nothing, and you attract his attention at your peril. Do you really want the Revenue crawling all over you?

Don't miss out on a family bonus The new child tax credit that will be paid from next April could put up to (pounds) 93.30 a week in the pockets of low-paid families. But those on higher earnings will be less well off than they are now because of a hike in National Insurance.

Nine out of 10 families should qualify for some help from the new tax credit, which differs from the existing children's tax credit in a number of ways. For a start, it is crucial that all families with a household income of less than (pounds) 60,000 apply for the credit as soon as possible, or it could be lost forever. Unlike other tax breaks, it can only be backdated for three months.

The new credit will be paid to the main carer - normally the woman - rather than the higher earner, so some mothers will need to open bank accounts or savings accounts into which it can be paid. And the size of the credit will be based on household income, rather than the salary of the highest earner.

A family with a (pounds) 5000 income will get (pounds) 38 weekly for one child, (pounds) 65.70 for two children and (pounds) 93.30 for three children. But households with income above (pounds) 20,000 can only expect (pounds) 10.40, irrespective of how many children they have. Furthermore, at least half that is likely to be removed by the increase in National Insurance.

Information about how to apply is available from your tax office, or you can visit the Inland Revenue's website. It makes sense to gather a few key documents to help with the form - which, with 56 questions, is less than simple. The Revenue suggests you have the following to hand:

lPayslips or P60, to help answer questions about your employer, your income and your National Insurance number.

lIf you are self-employed, your unique tax reference (UTR), which should be on your tax return or your statement of account, and details of your self-employed income for 2001-2002.

lDetails of any social security benefits you and your partner received in the tax year 2001-2002 and the current tax year.

lChild benefit details and your child benefit reference number.

lInformation about child carers.

lBank details. You will need details of your bank or building society account, such as your sort code, account number and building society reference number.

lDetails of any other income for 2001-2002 - for example income from savings, pensions or property.

Your self-assessment checklist employees l A P60, which states earnings for the year. You get this from your employer l A P11D, which shows any benefits in kind you have received, such as a company car or health insurance self-employed l Accounts for the year, including cash books, purchase and sales ledgers and petty cash books l Invoices l Expenses and receipts Investors l Dividend vouchers l Interest certificates from banks or building societies, or copies of statements l Evidence of tax deduction. This is available from your savings institution l All rent and expenses records if you own a property which is let out pensions l Pension statement

Copyright 2003 SMG Sunday Newspapers Ltd.
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