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Don’t be taxed by the Tax Return form

Don’t be tempted to "fiddle" your Tax Return form, because now you are more likely than ever to get caught

The National Audit Office has recommended the Inland Revenue increase its prosecution activity as a way of deterring customers from evading paying tax. Only 60 individuals a year are prosecuted for tax evasion, with most fraud tackled through non-criminal investigation. This, however, could be about to change. Cash transactions, offshore accounts and structures to conceal taxable assets and transactions are typical forms of fraud they want to crack down on.

About a third of taxpayers receive Tax Return forms and for most the problem is more likely to be getting the form in on time than a prosecution for fraud. Last year a third had not returned the form by one week before the January deadline.

Don't ignore the forms but plan early and gather together information such as P60, details of building society interest and share dividend information as soon as possible. It is also advisable for anyone with complicated tax affairs to engage professional tax help, the cost of which is often tax deductible.

A Cambridge academic, for example, could have a salary and supplementary income from consultancy, royalties from writing and exam or supervision fees. This makes their tax affairs quite complicated.

You are also advised not to return your forms to meet the 30 September deadline just to allow the Revenue to calculate the tax because one in four of their calculations is wrong! The computerised software used by tax agents has been far more reliable than anything used by the Revenue.

For further information contact Jeff Harrison.

The information given in this article is of a general nature only and should not be considered as advice applicable to any particular situation for which specific request should be made to us.