Last updated 09:19, Friday, 10 October 2008

The annual trauma of tax return submission time is no longer a distant prospect. It has been heralded early this year by reminders from HM Revenue and Customs (HMRC) popping through people’s doors.

Time’s running out: For the first time, there’s a separate tax return deadline of October 31. You can still use the January 31 deadline, but only if you submit your form using the online service

The system has changed this year and, judging by the response I have received from some clients at least, there is some confusion.

This has, if anything, been exacerbated by the reminders.

Having said that, getting the questions out of the way in October may be no bad thing.

This year for the first time we have two quite separate tax return deadlines.

The usual deadline of January 31 is still there but, if you want or need to take that long, then you are required to submit the form using the online service.

If you still want to use a traditional paper form then you have only until the end of this month to do so.

Paper returns submitted from November onwards will be subject to penalties (fines).

The normal due date for payment of any tax due remains January 31 whichever route you take.

Obviously there is a substantial disadvantage for those wishing to use traditional means to fulfil their tax obligations but this is quite deliberate. HMRC finds it much easier if the information passes automatically into their data bank without human hands having to go anywhere near it.

The idea is that it is quicker, more accurate and, crucially, cheaper.

At Armstrong Watson we now submit virtually all our clients’ tax returns over the internet and so the deadline is still January 31 . In practice we have little alternative.

There are still a few types of people where the software can’t cope – including Members of Parliament who have special tax returns because of their expenses!

So who needs to submit a tax return?

The first absolute rule is that, if you are sent a return, you have to complete it and send it back.

The self-employed, company directors and many higher-rate taxpayers are sent returns on a regular basis as are people who receive rental income.

If you haven’t been sent a return, then you should still ask for one if you know that you will owe tax.

This might, for instance, be because you have only just started to receive rents or just gone into business.

Possibly you may have made a profit on selling assets which is liable to Capital Gains Tax. Failure to tell the tax man on time can still lead to penalties even if you don’t get sent a tax return.

Finally, you should consider asking for a tax return if you think the tax man owes you money. An undeniable virtue of the new online system is that repayments are now made much more quickly.

If you have any queries on tax returns or would like help please call freephone 0800 195 2161 or email moneymatters@armstrongwatson.co.uk