Self Assessment - the system by which over 9 million tax payers are held responsible for calculating what tax they owe to the HM Revenue & Customs - has been controversial since the scheme was first introduced in 1996, with many people dreading the annual arrival of their tax return.
The HMRC has always been well aware of this fact, and in response to calls to make the whole process as simple and painless as possible: online self assessment filing is the result.
It’s still relatively early days for the online system, but its popularity is spreading rapidly as more and more people become aware of its benefits.
Why you should seriously consider filing online
If you file your tax return online, all calculations are performed automatically. Not only are you spared any unpleasant arithmetic, you will also instantly know what money you owe - or better still, what money the Inland Revenue owes you.
If money is owed to you, it’ll be repaid within weeks - if not days. The manual system often takes far longer to process. Wouldn’t you like to be reunited with your cash sooner rather than later?
As soon as you have successfully submitted your tax return, you will receive immediate confirmation of its arrival - it’s impossible for it to get lost.
The HMRC offers full support through its self assessment helpline. This is open 8.00 A.M. and 8.00 P.M. seven days a week, apart from Christmas Day, Boxing Day and New Year's Day. Telephone: 0845 900 0444.
Security, Government Gateway and online filing
Many people still feel reluctant to transfer sensitive personal detail about themselves and their businesses over the internet - perhaps unsurprising in view of the number of new viruses and scams that are reported each week in the newspapers.
For sure, if you’re using the internet on a regular basis and don’t have up to date anti-virus software installed on your computer, you are, frankly, living on borrowed time. (As an aside - if you’re not using any anti-virus software, take yourself off to < grisoft.com>from where you can download a perfectly good free program called AVG.)
Online filing, on the other hand, is entirely risk free as your information is protected by one of the most sophisticated security systems in the world - it is almost impossible for anyone outside of the HMRC to view your data.
Data is submitted to a website called the Government Gateway, which is the central portal for all of its online services. The Government has plans to make more and more of its services available online over the coming years. In the long term, it wants the system to handle the majority of an estimated 5-6 billion annual government-related transactions.
When you access the Government Gateway, you do so via a secure pathway that is created between your computer and the government’s central server where your data is held.
All information you submit is encrypted and your account is further protected by a unique User ID and password. When you register with the Government Gateway for the first time, you will be allocated a secure online mailbox which is, in effect, an online safety deposit box - there is no risk that unauthorised prying eyes can get anywhere near your data.
How to register for online filing
Before beginning the registration process, make sure you have the following information close at hand:
Your name - exactly as it appears on the front of your tax return
Your Unique Taxpayer Reference (UTR) - which can also be found on the front of your tax-return.
Your e-mail address
Visit the HMRC site for a step-by-step guide to online self assessment
Completing and submitting your tax return online - your options
Tax returns are completed and submitted whilst connected to the HMRC's website. While you are not able to download the forms onto your computer to complete offline, due to security precautions, you are able to save a partially completed tax return and return to this at a later time or date. This is a very useful feature as you could conceivably need to track down information about yourself (or your business) that you might not have at hand when you first begin completing the form.
Alternatively, you may well wish to use one of a number of commercial software programs that have been developed to help you complete your tax return and file it online. Most of these programs have been developed to be easily accessible to Self Assessment novices and can save time (and grey hairs) by proactively ‘interviewing’ you about your personal financial circumstances and your business’ incomings and outgoings.
Based on the information you enter about yourself, a decent self assessment program will then decide which sections of the form you need to complete, thus sparing you the whole ugly decision making process and quite possibly, a few late nights.
Read our guide to choosing self assessment online by clicking here.