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Thursday, May 14, 1998 Published at 12:35 GMT 13:35 UK

Biz: Your Money: Money Reports

Taxing questions

Hector the tax inspector fills many people with dread. You need look no further than the number of taxpayers who missed the deadlines in the first year of self assessment for proof.

Despite the bewilderment, it is worth grasping the thorny issue and getting the matter sorted out sooner rather than later.

Forgetfulness brought on by fear or apathy leads to missed deadlines which mean financial penalties and interest charges on overdue tax payments.

Hector's new approach

The self-assessment system, introduced in 1997, was the largest single reform of British income tax since it was first introduced in 1798.

It shifts responsibility for providing information to the taxpayer. It does not shift the onus for calculating the tax bill as many people feared.

What is different is the tax return.

The Inland Revenue will process and check the figues and calculate how much tax is owed if the forms are returned by the end of September.

Even after the bills have been paid they are open to audit, so it is important to get things right first time.

Who does it apply to?

Self Assessment applies to you if you receive a tax return. The main groups which get tax returns are:

  • Self-employed
  • Company directors, employees or pensioners with more complex tax affairs (including those who pay 40% tax on any earnings)
  • Business partners
  • Trustees or personal representatives

Getting your act together

Self assessment requires taxpayers to carry out certain tasks by fixed deadlines. The dates to remember are:

  • April - Tax returns for 1997-98 are sent out

  • July 31 - Second payment on account for 1997-98 is due

  • September 30 - Deadline for submitting 1997-98 tax return if you want your liability worked out for you by the Inland Revenue

  • January 31 - Deadline for filing all 1997-98 tax returns. Deadline for paying any outstanding tax for 1997-98. First payment on account for 1998-99 due.

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In this section

Investing - art or science?

Taxing questions

Biting the tax return bullet

Mortgages made simple

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