It is fair to say that January 31st, self-assessment tax return deadline day, is not most people’s favourite day in the calendar. Tax returns are often filed at the last minute, after endless rummaging around for lost receipts and long-forgotten invoices.
PWC Director Lindsey Kutten said that companies and individuals are concerned about "how are they going to stay compliant’ and ‘how are they going to gather the right sort of data in order to file their tax returns."
Ultimately getting your tax return off successfully relies on having the right information to fill in. "A tax return, and tax computation is only as good as the information you put into it," said Kutten. "You can use the best app in the world to calculate your tax but if you put the wrong numbers into it you’re not going to be compliant".
Tech can help you keep track of the right data, and make the whole process a lot less painful.
All in one software solutions
GOV.uk facilitates tax returns being done via software tools. All the solutions allowed are listed on GOV.uk. Well known names include products from Sage like SageoOne, ProTax Light from Forbes Computer Systems and Thomson Reuters’ Digita suite.
The tools do not need to break the bank either. Taxfiler can be used from £10 a month; ABC Self Assessment costs £15 a person, while SimpleTax can be used from £5.
There are a variety of mobile apps that can help track expenses on your phone to make sure your you put in the right deductions.
Expense Manager on Android, for example, has been downloaded over one million times in the Google play store. It allows you to fill in all the important details about your expenses, and take a picture of the receipt too.
Expensify, on iPhone as well as Android, fulfils a similar role, and has been downloaded 500,000 times on Android alone.
As well as expenses, there are invoices and other pieces of documentation that need to be stored until they need to be used to complete bits of your tax return. DropBox is a perfect tool for storing everything like that up in the cloud, so that if anything happens to physical copies you are not missing key bits of information.
There are lots of alternative too with Box, Google Docs, and Microsoft’s One Drive all doing a similar job. One Drive has the advantage of easy synchronisation with all Microsoft systems, and all have decent mobile offerings too.
Dropbox for business is priced at £11 a user a month if paid for on a monthly basis, while a personal Dropbox Pro account cots £79 a year, or £7.99 a month for 1TB of data storage.
By comparison, Office 365 Home can be used by five users with a 1 TB of data costing £5.99, or £3.10 per person per month for business users.
Keeping up to date during the year
The best way to make completing a tax return run as smoothly as possible is to make sure that your books are up to date. There is a lot of software out there that can do this, notably Quickbooks and Freshbooks.
Remember to keep that data once you have submitted the tax return though. "HMRC can ask questions for many years after you’ve filed your tax returns, so you have to be able to evidence what you’re putting into you’re tax return," said Kutten.
Have you paid the right amount?
Despite the relief of having completed a tax return, and paid the bill on time, there can always be a nagging doubt that you’ve paid the wrong amount. Consumer advocate group Which! has an online tax calculator that can help put your mind at rest, as does moneysavingexpert.com.
Using one of these tools is a helpful guide before you submit your tax return, to make sure what the HMRC site gives you is in right.
Sometimes, the best thing to do with a tax return is to hand it over to a professional. Services like Flow combine online cloud accounting with offline service, while other online accountants offer to complete your tax return for as little as £99.
Many of the solutions above are well established. Fintech start-ups haven’t yet jumped onto the tax bandwagon, with Kutten speculating it may not be disruptive enough an area for them. No doubt though that tech will continue to make tax returns less taxing.