31 January is the deadline for filing an annual tax return digitally to HMRC.
While the last day of the month is the deadline that matters, are you sure you have everything you need to hand to successfully complete your return?
What you’ll need
You have/will receive your Unique Taxpayer Reference (usually called a UTR) number after registering with the service, but you will also need your P60, any P45s or P11Ds you might have received over the course of the tax year, as well as bank statements, invoices and receipts to use against your claim, plus any evidence of any investments and other income you may have.
You can find details of how to register here.
What to declare
If you are unsure about what to declare in your return, you might feel more confident if you ask a legal expert for help – but in basic terms, what you need to show is the detail of income from any employment, profits from self-employment, any rental income you have, any capital gains from the sale of any assets, as well as proof of dividends from savings or interest.
What you can deduct
When it comes to deductions, you can of course reduce any amount you owe by offsetting them against your income. On top of your 2023/24 personal allowance (now £12,570), you can also claim relief on pension contributions, any charity donations you make personally, or any other business expenses such as office rental, travel costs and office equipment. You can also claim a marriage allowance if you or your partner earn less than the personal amount, which would allow up to transfer up to £1,260 of your unused allowance.
After all these deductions, If the amount you owe is worked out to be over £1,000, do not panic. What happens in this instance is that HMRC may require you to pay in advance of next year’s liability – one at the end of January, and on again in July. Be aware that tou can apply to have these lowered if you expect your tax bill to be lower next year.
Get some help
If this all sounds too baffling – or like it could easily become that way as a result of your business being complex through other streams of income or other gains, remember you can hire an accountant to assist you, if you don’t already. You never know – you might find that you have overlooked a particular element of your operations that is deductible from your tax bill – in fact, the very cost of the accountant is a deduction in itself.
Late fees
As you would expect, there are also penalties for late payments. Returns submitted after 31 January are fined £100, with increases if still not paid again in three months, six months and a year after deadline. In addition, interest is charged on any overdue tax, at a rate of 5%, which rises as time wears on.
If you are in any doubt, or have any concerns, please contact a tax expert for help and advice. There is also a government guide to working out whether you need to pay here.
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