If you've been away from the UK since 1996 you might not know what self-assessment is, but you'd certainly be in a minority.
Expenses like travel, rent and clothes can be claimed back
For everyone else, self-assessment is now a fact of life. Whether it was cuddly Hector the Inspector, Mrs Doyle urging people to "go on" or intrepid Adam Hart-Davis abseiling down a building, self-assessment can not be avoided.
The self-assessment system shifts the burden for administering tax from the Inland Revenue on to the individual taxpayer.
The key is record-keeping. Everyone has to keep details of all their income, capital gains and spending for at least 22 months after the end of the relevant tax year.
Anyone who runs a business, the self-employed, those in partnership and people who let out their property, have to keep records for six years after the end of the tax year to which they relate.
Records to keep
Bank and building society statements
Cash invested in your business
Company money taken for personal use
Cost of vehicles and property
Receipts and invoices
Details of pay, tax and expenses
Self-assessment affects everyone who gets a tax return.
You should get a tax return if you are self-employed, run a business, are a company director, pay higher rate (40%) tax, have complex tax affairs, rent out property or have any untaxed income or untaxed interest.
If you are in any doubt, you should ask your local Inland Revenue office for help.
Tax returns are sent out by post every year. Taxpayers can, however, opt to file their return electronically on the internet.
The key dates to remember with self-assessment are 30 September and 31 January.
Taxpayers who send their completed tax return to the Inland Revenue by 30 September do not have to calculate the tax bill themselves.
It will also be possible for people to have any unpaid tax of less than £2,000 collected through the following year's PAYE tax code number.
Anyone who misses this deadline will simply have to work out the tax bill themselves and pay directly to the Revenue by cheque or credit card.
People who missed the September deadline, must get their returns in by 31 January
This is the really important deadline because anyone who misses it will have to pay a fixed penalty of £100.
There there are other charges and interest payments if the return remains outstanding for much longer.
In practice, the Revenue allows a day or two's leeway to cater for postal delays - but don't assume that a return that arrives on 3 February won't be treated as late, and fined accordingly.
The self-employed can claim some items back against their tax bill. It is important to keep a record of expenditure on all these items for accounting purposes, but they cannot be used to obtain tax relief.
There are many overhead expenses that can be claimed against tax.
Reducing your tax bill
Mortgage costs are not really covered - it is possible to claim a small amount as the "cost of using your house as an office" but if you try to claim mortgage payments as a tax deductible expense, it is possible that this could give rise to a capital gains tax charge when you sell your house.
Normally, of course, the sale of your main residential property is free of CGT - but if the Revenue can show you have been paying the mortgage and treating it as a business expense, the tax position on your house sale will change.
Expenses you cannot claim
Entertaining clients and customers
Home to work travel
Clothes, hair care and make up
Travel from home to work is not allowed but travel from work to, say, a client's premises, is covered.
If you use a season ticket to cover all this travel, it is possible to apportion an element of the total cost of the ticket as a business expense and claim accordingly.
The use of a car is an expense that can be used to claim a reduction in tax, but only the business proportion based on the percentage of your total annual mileage that is exclusively for business use.
The Revenue is well accustomed to outlandish motoring claims and this means that it knows what is considered reasonable mileage and what is not.
Subsistence, that is the cost of meals and drinks while away from home, can be counted but only in moderate amounts as otherwise it starts to look like "entertainment", which is not allowable.
A range of other business expenses are allowable, including publicity costs such as advertising, the cost of complying with health and safety regulations (for instance the cost of protective clothing), accountancy costs and all bookkeeping and financial services relating to the maintenance of proper accounts.
Bad debts are also allowable as the absence of the income effectively cancels the sale from the tax point of view.