Self Assessment Tax Return Service Multisolo Tax Return Service For directors who are working through their own company, Multisolo provides a basic tax return which is included as part of the annual accountancy fees. Details of the service and a questionnaire asking you to give details of your income from all sources will be sent to you around June / July 2009 in relation to the 2008/9 tax return service. For employees of Multisolo Umbrella Ltd, they are unlikely to be required to complete a tax return unless they have been sent one to complete or have other income that requires them to complete a tax return. Multisolo can assist you in completing this tax return for a competitive fee. Where the return is particularly complex an additional fee would apply, we will contact you to discuss this before proceeding. A request to use the tax return service should be made by e-mailing firstname.lastname@example.org by 31 July 2009. We will then send you the questionnaire to complete. Once we have received your questionnaire, we will prepare your tax return and calculate your tax position. A copy of the tax return will be sent to you for agreement before being submitted to HMRC. We will submit the tax return online where possible. What is Self Assessment? Self Assessment involves completing an online or paper tax return in order to tell HMRC about your income and capital gains (profits on the sale of certain assets), or to claim tax allowances or reliefs against your tax bill. There are different types of tax return and different 'supplementary pages' you may need to complete depending on your circumstances. There are also deadlines for sending your tax return in - and penalties and interest charges if it arrives late. Who needs to complete a Self Assessment tax return? If you pay tax on your earnings or pensions through PAYE (Pay As You Earn) your employer or pension provider deducts tax on our behalf and you won't usually need to complete a tax return. If you have more complicated tax affairs you may need to complete a tax return. There are also certain circumstances in which you will always need to complete a tax return - for example if you are self-employed, a company director or a trustee or if you have foreign income. If you are a director of your own Personal Service Company, HMRC will require you to complete a Self Assessment Tax Return. Who else needs to complete a tax return? self-employed people (including members of a partnership) company directors (except not for profit organisations) ministers of religion (any faith) people who get rent or income from land and property in the UK (but if you are an employee and this income is less than £2,500 a year a tax return may not be necessary) people who have other untaxed income and the tax due on it cannot be collected though a PAYE tax code people with taxable foreign income, even if they are not normally resident in the UK (this includes non-resident landlords) anyone who receives annually (or can be treated as receiving) income from a trust or settlement, or any income from the estate of a deceased person, and further tax is due on that income trustees and personal representatives (including people who manage the tax affairs of deceased persons) trustees of certain pension schemes names or members of Lloyd's employees and pensioners with more complex tax affairs - see below Remember, if you have any income that is not taxed at source, like rents or freelance earnings, you may need to complete a tax return. Employees and pensioners with complex tax affairs You need to fill in a tax return if you: have an annual income of £100,000 or more have annual income from savings or investments of £10,000 or more (before tax) claim against tax for expenses or professional subscriptions of £2,500 or more have untaxed income of £2,500 or more (although some pensioners may be able to pay the tax on this through their PAYE tax code) owe tax at the end of the year that cannot be collected through a change to your PAYE tax code for the following year If you are 65 or over, HM Revenue & Customs may ask you to fill in a tax return so that they can work out how much higher personal allowance or Married Couple's Allowance you should get. Frequently Asked Questions How do I get a tax return? Self Assessment tax returns are normally sent out by HMRC in April each year (or a notice to fill in a tax return if you file online). If you've not received a return but think you should complete one, please contact your Tax Office explaining why you need to complete one. You should do this by 6 October after the end of the tax year to avoid a penalty for failure to notify being liable to complete a tax return. If I receive a tax return or a notice to complete a tax return, do I have to complete it? Yes - even if you pay all your tax through PAYE and believe that you have no extra tax to pay. A tax return is sometimes required for other reasons, for example to check if the correct tax has been paid overall. What is the deadline for sending in my tax return? From April 2008 (for the 2007-08 tax returns) the deadlines have changed: you must send paper tax returns to HRMC by 31 October (or 3 months after the date of issue of the notice - whichever is the later) if you send in an online tax return you've got until 31 January (or 3 months after the date of issue of the notice - whichever is the later) What are the key dates for submitting tax returns / making payments? 31 October: Paper returns If you are sent a notice to complete a tax return before or on 31 July and you want to send HMRC a paper return, you must send the completed return back by 31 October. If you are sent a notice to complete a tax return after 31 July you must send the completed paper tax return back by the later of 31 October or three months following the date of issue of the notice. For paper returns that reach HMRC by this date they will: calculate your tax for you (though you can calculate it for yourself if you want) tell you what to pay by the following 31 January collect tax through your tax code (if possible) where you owe less than £2,000 unless you tell them otherwise. If the paper return arrives after this deadline you'll be charged an automatic £100 penalty. (Late Partnership returns attract a £100 penalty for each partner. Late Trust and Estate returns result in a £100 charge to the trust or estate.) 30 December: Online returns (for tax to be collected through your tax code) You must send HMRC your online tax return by this date if you want them to collect tax through your tax code (if possible) where you owe less than £2,000. Otherwise you can send it to HMRC up to 31 January. 31 January: Online returns Where a notice to complete a tax return is issued before 31 October, this is the deadline for sending back an online tax return. Where a notice to file a tax return is issued after 31 October the deadline to send it back is three months after the date of issue of the notice. If it arrives after this deadline you'll be charged an automatic £100 penalty by HMRC. (There are a very few cases where online tax returns can't be made. In these cases the deadline by which the paper return must reach HMRC is 31 January). 31 January If you were sent a notice to complete a tax return by the previous 31 October, then you must pay HMRC any balance of any tax you owe by 31 January. This is referred to as the 'balancing payment'. HMRC will charge you daily interest after this date, until they receive your payment. This is also the date by which you may be asked to make any first 'payment on account' for the current tax year. For example, on 31 January 2009 you may have to pay both of the following: the balance of tax owing for the year 2007-08; and the first 'payment on account' for 2008-09 28 February If you still haven't paid the balancing payment due by 31 January, you'll be charged an automatic 5 per cent surcharge on top of the amount still owing. This is in addition to any interest payments. 31 July If you are due to make payments on account, this is the deadline for making a second 'payment on account' for tax owing for the preceding tax year. If you still owe tax that you were due to pay by the previous 31 January, you'll be charged a second automatic 5 per cent surcharge on top of the amount you owe. Tax returns received after 31 October If you received your tax return (or Notice to file if you file online) after 31 October, you must complete and return it to HMRC within three months of the date of the receipt. What can happen if I do not complete my tax return? If you're late paying any tax you owe, HMRC may charge you interest, penalties and surcharges. If your tax return is late and HMRC think you have not paid enough tax on time, they can estimate the amount of tax they think you should pay. They call this a 'determination' of tax due. You can only update this determination by sending in your completed tax return. You may also be liable to penalties and surcharges. What are the advantages of filing my tax return online? online tax returns are processed faster than paper returns immediate online acknowledgement as soon as HMRC receive your completed tax return it is safe and secure your tax is worked out automatically as you complete the form so you know what you owe or are owed right away any money you are owed by HMRC is repaid to you more quickly than if you file on paper the deadline for online returns is 31 January if you're on PAYE (Pay As You Earn) and want to pay any tax you owe (where this is possible) through your tax code, the deadline for filing online is 30 December filing online is convenient and can be done at any time of day or night you can monitor your Self Assessment 'account' online - this includes statements of your payment history and what you currently owe or are owed If you wish to file your own tax return online, you need to register for Self Assessment Online, receive a 'User ID' and then wait to receive an 'Activation PIN' (personal identity number). Please see attached link for further information. http://www.hmrc.gov.uk/sa/understand-online.htm What are Payments on Account? You will be asked to make two 'payments on account' for the current tax year if the total tax due in the previous tax year is less than 80 per cent of the tax deducted at source through the Pay As You Earn (PAYE) system and your Self Assessment tax bill for the previous year was over £500 (£1000 from 6 April 2009 - tax year 2009-10). You will usually have to make 'payments on account' of the current year's tax, one by 31 January in the current year and the other by the following 31 July. Each payment on account equals one half of the previous year's tax liability. If you know that your income for the current year will be lower than last year's you can ask to reduce your payments on account. But: you'll have to pay interest on any extra tax that HMRC later find was due you might have to pay a penalty if you ask to reduce the payments without taking proper care What are balancing payments? You may have to pay a 'balancing payment' for the previous tax year. This includes any tax you owe and any interest due on late payments and penalties. The balancing payment takes account of any payments on account you've already made. You'll have to make the balancing payment by 31 January after the end of the tax year. For example, for the tax year 2007-08 (6 April 2007 to 5 April 2008) the balancing payment will be due on 31 January 2009.