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Tax Advice & Planning

It used to be just the rich that got soaked for tax - now it seems like we all do. Don't pay more tax than you absolutely need to (sounds like a vote-winner to me).

The number of us paying the higher rate of income tax of 40 per cent has increased by more than 50 per cent since 1997. That's still only 11 per cent of all those paying any kind of income tax, but as the higher rate begins at around £35,000, many professionals are hit relatively hard. Moreover, if other forms of tax are considered, the extent of the tax burden on those with lower incomes becomes clearer. In 2001-2002 the poorest 20 per cent of the population paid nearly 42 per cent of their gross incomes in tax, and by 2007-2008, the government plans to be taking a further £117.8bn, the equivalent of almost £5,000 for every household in the UK.

Given the frequency with which tax loopholes open and shut in any advanced economy, it would be tempting fate to offer any specific pointers to how you might reduce your personal tax bill. What I would say, though, is that being scrupulous and attentive to detail will almost certainly yield opportunities for you to pay less tax.

Six steps to completing and sending back your tax return

OK, so it's tempting to keep putting off filling in your tax return. However, there's really no benefit in doing so. If you tackle it earlier you'll have more time to get help if you need it. Just follow these six steps:

Get all your tax records together, such as bank and building society statements, business earnings, expenses or accounts where appropriate. If you have received a paper tax return, read pages 1 and 2 first.
Check you've got all the pages you need. If your tax affairs are more complex than average, you may need more than the basic tax return. Contact your tax office in this case, or alternatively you might be able to download the relevant papers from the internet.
Fill in the tax return by following the guidance notes supplied. Make sure you understand them and are sure of the figures you want to enter before putting any figures down. In particular, keep an eye out for expenses that you are allowed to set against tax - membership of professional bodies and so on
If you need help, contact your tax office (there should be a telephone number at the front of the form).
Check your tax return once you've finished, make sure you haven't forgotten anything, like signing it and attaching all your supplementary papers and relevant forms.
Make sure that you submit it before the deadline, or you risk having to pay a fine. Deadlines are important - miss them and you risk a fine, and there's a nagging if apocryphal suspicion that attracting the attention of the tax authorities in this way might make you a more likely target for a tax investigation.

After you've sent in your return, most tax offices would expect you to hang on to the supporting documents and records for at least 12 months. If you're self-employed, you should retain your calculations and supporting documents for anything up to seven years.


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