The Inland Revenue's (IR) new simplified self-assessment tax returns may not be so straightforward for entrepreneurs, accountants have warned.
While the IR has begun sending the forms out to 1.5 million taxpayers, the Association of Chartered Certified Accountants (ACCA) has cautioned that the accompanying guidance notes may give a false impression of an individual's tax position.
If completed incorrectly, small business owners could potentially leave themselves open to a tax investigation.
ACCA stressed its concern that many people may believe they have an inflated tax liability because the guidance notes do not give details of the full personal tax allowances available.
The accounting body is also concerned that people receiving the simplified form will be left with the responsibility of determining whether they have had any financial dealings outside the scope of the shortened form.
The IR's new shortened four-page returns for the 2004-05 tax year are targeted at taxpayers it considers to have had simple affairs in 2003-04, particularly self-employed people with small businesses and turnover less than £15,000.
"Many people will be uncertain as to whether they should be completing the short form or the traditional 16-page return," said Glenn Collins, head of business advisory at ACCA. "Some may consider that - as this form appears easy to complete - they can dispense with the services of a qualified accountant.
"But this could be unwise given the onus is on the taxpayer to assess whether he or she is filling in the right form in the first place."
