Tax returns are a must to understand in today’s global business world. They provide documentation as to your business’ earnings and expenditures for the year ended. It includes income from loans and dividends received by the company. These forms are filed with Companies House, the UK’s accounting authority. There are two types of returns: general tax and business tax.
A tax return is the complete documentation of documents that calculates the income earned by an entity or individual with respect to an income tax liability, and the amount of tax due to the government. It should include the total income that came in, the total income tax payable, plus any payable to UK non-domiciled individuals, and the tax credits that an individual or entity earned. These forms also include information on the assets owned and liabilities owed to UK tax authorities. The amount to be paid as tax is also entered into the form. Examples of tax credits are dividends paid, interest paid, and the value of pension arrangements. The total tax due is arrived at by adding the individual’s personal tax liability, the corporate tax credit, and the rate of tax applicable to such payable, among other things.
The first step in filing UK tax returns is identifying a taxpayer. This can be done by contacting an agency that collects and prepares tax returns. In most cases, a taxpayer may also be required to furnish some personal information. Some of these data include address, employer, earnings, marital status, and others. The information submitted to an agency will help it prepare the appropriate forms.
After identifying the taxpayer and preparing the appropriate tax returns, they are sent to a taxpayer solicitor. The solicitor then reviews the forms and checks the accuracy of information provided. If errors are found, the taxpayer must settle them with the tax office before a tax refund is issued. Taxpayers can claim a tax refund relief if they meet certain requirements. The most common requirements are that the taxpayer must not be claiming deductions, the tax arrears must be paid, and the tax payer must be a resident of the UK.
Many organizations offer services that allow tax returns to be electronically filed. This option, however, has its own set of tax reporting requirements. Most tax professionals prefer individuals file their tax returns directly with the HM Revenue and Customs (HMRC). This ensures the correct tax amounts have been received for tax payment purposes and eliminates the need for the electronic filing of tax returns.
There are other ways in which tax returns may be filed electronically. These include completing an electronic form for a tax return, printing an electronic tax return, or sending electronically to the tax return to an authorized recipient. In addition to sending the tax returns electronically, tax payers can also apply for an amended return. An amended return is a corrected or updated copy of the original tax return that contains any errors. Applying for and receiving an amended tax return must be done directly with HMRC by mail.