0800 140 4644
It’s that time of the year again… Tax Return season. It’s like Christmas, only better. Or maybe not.
The deadline for filing your 2019/2020 (year ending 5th April 2020) Tax Return online is 31st January 2021, or 20 days away. Payment of your taxes is 31st January 2021, unless your tax liability is in excess of £1,000, in which case you will fall under Payment on Account so tax will be due on 31st January 2021 and 31st July 2021.
Whilst the Coronavirus Support Schemes have created many concessions, the Government have resisted (to date) delaying the deadline for filing your Tax Returns, although HMRC will be open to appeals for penalties leveraged on the late filing of Tax Returns, if it was specifically caused by Coronavirus.
If you are looking to file your Self-Assessment Tax Return (Tax Return) yourself, here are some pointers which we hope you will find useful:
#1 – Register with HMRC
OK it might sound silly, but you cannot submit a Tax Return unless you are registered for Self-Assessment with HMRC and have your ten digit Unique Tax Reference (UTR). If you are unsure if you need to complete a Tax Return, please check HMRC’s website.
#2 – Have your circumstances changed? Do you still need to submit a Tax Return?
Although you may have submitted a Tax Return in the past, it doesn’t mean you need to this year, even if HMRC have sent you a notice to file letter. Check HMRC’s website to check you still need to file at Tax Return. HMRC can get in touch and inform you if they think you no longer need to submit a Tax Return, but they can only act on the information they have so won’t always know. Why expose yourself to the time spent and hassle of filing Tax Returns, let alone the risk of penalties or assessment by completing a Tax Return unnecessarily.
#3 – Government Gateway
Assuming you are filing your Tax Return online (the deadline for filing by post is 31st October), you will need to be registered with the Government Gateway and have a note of your login and password. If you haven’t done this already, allow yourself a bit of time for HMRC to post out these details to you. You can register here. If you have forgotten your password, you can reset these using the same link.
#4 – Allow time
As thrilling as it is to do it last minute and get that rush (sorry Coronavirus has left us having to be more creative with our “rushes”) allow plenty of time to submit your Tax Return, especially as the Government Gateway can become very slow when lots of people are accessing it.
Also the sooner your file your Tax Return, the longer you will have to save the money to pay your tax, if applicable, rather than giving yourself a last minute heart attack. This can particularly happen if you are suddenly within Payment on Account when you may have to pay an additional 50% of your previous year’s bill on 31st January, followed by the same amount again on 31st July. If your income exceeds £100,000 you will also see your personal allowance eroded, so your tax bill might be more than you expect.
Whilst HMRC have said that they would be as flexible as they can be due to the current Coronavirus pandemic, so will accept late filing of Tax Returns if this is the reason for it, you will still need to spend time appealing any penalties for late filing and following-up with HMRC, so we don’t recommend leaving it to the last minute in case something happens.
#5 – Claim Expenses and Allowances
To ensure you do not pay any more tax than you need to, make sure you claim all the Expenses and Allowances you can. This can include costs you have incurred wholly and exclusively for earning your income, Marriage Allowance and Use of Home Allowance to name but a few.
#6 – Claim tax relief on Charitable Donations, Pension Contributions, or SEIS/EIS/VCT investments
Make sure you claim all the tax reliefs you can. For example, have you made Charitable Donations, Pension Contributions, SEIS/EIS/VCT investments?
If you haven’t taken advantage of these for this tax year, you might want to think about this for next years tax.
#7 – Include all your sources of income
Make sure you include all your employment income, benefits-in-kind, capital gains, dividend income, bank interest, sole trader income, partnership income, rental income and indeed any other sources of income on your Tax Return. HMRC have very sophisticated software now which performs a lot of checks behind the scenes to ensure your Tax Return is accurate and complete. It simply isn’t worth the risk of having a HMRC Check, Enquiry or the Interest and Penalties which might be incurred.
Similarly for completeness, make sure you have included details of Child Benefit and Student Loans, if applicable.
#8 – Capital Allowances
Have you claimed all the Annual Investment Allowances you can in order to reduce your income tax?
Conversely, if your income is less than your Personal Allowance of £12,500 for 2019/20, you might want to consider reducing your claim for Capital Allowance, so you don’t waste your Personal Allowance and instead carry it forward to future years.
#9 – Claim to reduce your Payments on Account?
If your current year income (2020/21) is significantly less than that within your 2019/20 Tax Return, consider making a claim to reduce your Payment on Account. However, only do this if your income really is going to be lower. HMRC will leverage interest if you do this and it turns out to not be accurate from when the actual Payment on Account amount should have been payable.
#10 – Seek Professional Advice
OK so we might be biased, but especially if your Tax Return is not simple, we really recommend seeking Professional Advice. To someone like us, we have countless years experience doing them day-in-day-out so this really is incomparable to someone who only does it once a year for themselves. You can end up paying a huge amount in Interest and Penalties if you file an incorrect Tax Return, not to mention the huge stress and drain on your time which you simply don’t need. Additionally you could actually pay more tax as you might not know of all the expenses, allowances or reliefs which might be available to you. Remember, our fee is tax deductible. For a more accurate, stress-free, and time-efficient Tax Return process, especially if it’s complex, seeking professional advice from a seasoned self-assessment accountant is highly recommended. The potential savings in terms of both money and time, coupled with the assurance of avoiding costly mistakes, make it a wise investment in your financial well-being.
Black and White Accounting
Whilst many submit their own Tax Returns without issue, as at today, HMRC estimate 45%, or 12.1m are still to submit theirs for 2019/20 with just 20 days to go. Employing an Accountant to do it will not only typically make the process a lot easier for you (especially if your affairs are not straightforward), reducing your stress at this already most difficult of times, you also know that it has been done correctly by a professional and they can often save you tax due to their understanding of tax allowances and legislation.
At Black and White we chase the records of our clients in as soon as possible to ensure not only that the Tax Return is filed in plenty of time, but our clients also know how much tax is payable as soon as possible, so they can save up or put this money aside, if they haven’t already.
If you are really struggling to get your Tax Return, please do get in touch by contacting Black and White Chartered Certified Accountants, populate the “Got a Question” form on the right, or call us on 0800 140 4644 and we’d be delighted to help you.
