31st January is the deadline for filing your self-assessment tax return, and for paying any tax you owe.
This year it’s more important than ever to ensure your tax return is fully accurate as HMRC prepares to deploy “Connect”, the super-computer system, which has been developed over a number of years, at a cost of over £100m.
The powerful Connect system, draws on information from both government and commercial sources to create an accurate profile of each tax payers total income.
As well as drawing on information from wide range of sources, including banks, financial institutions and the Land Registry, the system also takes advantage of our large digital footprint and utilises data from online platforms such eBay and AirBnB, to identify any additional income that may not have been declared.
Since September 2016 Connect has also had the ability to gather information from 60 different countries.
HMRC will use the information gathered by Connect to identify any discrepancies between declared and undeclared income. Where there is a discrepancy in the information supplied by the taxpayer, the account is flagged for possible investigation.
Where minor tax errors may have previously gone unnoticed, it is now more likely that these will be picked up and investigated. It is therefore more important than ever that all income is declared in your tax return.
Who needs to complete a tax return?
Self-assessment tax returns have to be completed by the self-employed and individuals with additional earnings over £2,500, whether from employment, savings and investments or online selling.
You also need to complete a return if your income was more than £100,000 in the past year or if you owe capital gains tax from selling assets such as shares or a second property. Families claiming child benefit will also need to file a self-assessment tax return if one parent earns £50,000 or more.
It’s my first time completing a self-assessment tax return, what do I need to do?
If this is your first time completing a self-assessment tax return you will need to register. Click here to register for the self-assessment service and choose the form that fits your circumstances (employee, sole trader, partner, etc). You’ll also need to have your national insurance number handy.