It’s time to sort out your tax returns

Fill in your self-assessment forms within the next fortnight or face a £100 fine - that’s the message that business advisors, PricewaterhouseCoopers (PwC) are sending out to taxpayers across the country who have yet to complete their forms.

This year the deadline has been extended to the morning of February 2. Miss this deadline, though, and you’ll be fined £100, plus a surcharge of five per cent of the amount of unpaid tax.

The good news is that there’s still time for taxpayers to complete their forms without incurring hefty charges. PwC tax partner, Bronach Doyle said: “Two weeks is just enough time to tackle the form, obtain missing documents and get any professional help that is needed.”

There are a number of common mistakes that taxpayers make – including getting the formula – net + tax = gross – mixed up. You need to put the net amount, the tax deducted and the gross amount for any dividend or interest payments you receive – make sure that they’re in the correct boxes and that they add up.

In addition, all pensions, including the state pension, must be included. Apart from a few exceptions, such as pensions for winning the Victoria Cross, all pensions are taxable.

A final reminder is to not use pence – round up the figures to your advantage. However, remember that net + tax must still equal gross in the dividend and interest boxes. Remember – the odd pound difference could make the Revenue’s computer reject your form.

Taxpayers should also be aware that January 31 also sees the end of generous pension tax breaks. Bronach Doyle says: “The Chancellor is ending some of the rules that allowed taxpayers to make use of unused pension contributions from previous years and claim tax relief on the contributions.

These ‘carry-forward-carry-back’ allowances will change at the end of the month and taxpayers should check their entitlement carefully to maximise their last opportunity to top up their pension under these rules.” (KMcA)