Business

'Act now' warning over tax returns

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People required to complete a self-assessment tax return must act now as the deadline is looming, accountants have said.

Nearly 12 million people, primarily those with more than one source of income and the self-employed, are required to complete returns.

The deadline for online filing is the end of January, but those filing for the first time need to act earlier.

They will need a taxpayer reference, which is sent through the post.

Those using the system for the first time, or who have lost the details, need to contact HM Revenue and Customs (HMRC). The tax authority sends a copy of the reference, or activation code, by mail.

Chas Roy-Chowdhury, head of taxation at the ACCA accountancy body, said that the system had proved to be a sensible way to fight fraud, but it did require people to take action well before the deadline.

Penalties

All tax returns for the 2017-18 tax year need to be completed online by the end of January. The filing deadline for those making paper returns has gone.

HMRC could demand a penalty of £100 for late filling during the first three months after the deadline.

After three months, additional penalties of £10 per day can be demanded, up to a maximum of £900, followed by further charges six and 12 months after the deadline.

Financial planning company Tilney said that a year ago, a total of 2.1 million people filed their return in the final four weeks leading up to the deadline.

"It is all too easy to put off things that most of us regard as tedious until the 11th hour, but leaving your tax return to the very last minute can be both stressful and risky," said managing director Jason Hollands.

"It can be stressful because filing a return can involve quite a bit of preparation and not everyone is great at orderly record-keeping. They may need to track down their taxpayer reference, payslips and annual P60 statement, check bank accounts for interest and dig out details of any share dividends and tax credits received."

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