The taxpayer's new burden
For those who are incapable or can't bear
to fill in the new self-assessment tax return, the best course of action will be to employ a tax expert.
Charges for their services are generally on a sliding scale, according to each case's complexity. The lowest price is likely to be about £50 - the rate Barclays Bank charges for its over-the-phone TaxGuard service which is aimed at helping people with fairly straightforward tax affairs.
The Tax Team, a franchise-based nationwide network of consultants, offers a range of fixed-fee services. Basic form completion for an uncomplicated case costs £75, including VAT. The premium service, costing £275, includes tax advice and is suited to people with several sources of income.
Although these services may sound expensive, it is worth bearing in mind that the self-assessment tax return gives very little guidance on how to pay as little tax as possible.
Advisers should be members of the Chartered Institute of Taxation (ATII) or Association of Taxation Technicians (ATT), or any qualified accountant.
People who already employ an accountant should discuss the new arrangements with them as soon as possible. Self-assessment should not be regarded as an invitation to discard an accountant's services: it should make little difference to the relationship, or the workload, once the transition period is over.
However, everyone should be aware that since April 1996 it has become a legal requirement - backed by penalties of up to £3,000 - to keep more detailed records of income and expenditure.
Inland Revenue is also completing its move to current-year assessment, which means it demands that tax is paid on the previous year's earnings, rather than on older income. 1996-97 has been declared a transitional year, which will combine that year's accounts with those of the preceding year, 1995-96. The two annual incomes will be averaged - that is to say, added together and divided by two - so that the individual pays no more tax than usual.
Why the Inland Revenue is bothering is a little baffling. Luckily, it will cause more trouble only for accountants, who will be unemployed for a year, followed by a year when they work twice as hard. But remember, it is the individual's responsibility - not the accountant's - to get the tax return and payment in on time.
Those wishing to bypass the use of a tax expert can contact Inland Revenue directly on its self-assessment helpline on 0345 161514. The local Tax Enquiry Centre, listed in the phone book under Inland Revenue, can also help.
