Did you know that the deadline for self-assessment tax returns is January 31st? Don’t miss out on the opportunity to do more with your money, the end of the tax year may be way off in April, but it is the actions you take now which can help you maximise your tax reliefs.
For example, if you pay into a Pension as a higher or additional rate taxpayer, you can use your self-assessment tax return to claim back your extra tax relief or contact HMRC to arrange a tax refund.
As long as you haven’t exceeded your annual allowance, you’ll get 20% tax relief whatever type of taxpayer you are, but as a higher rate taxpayer you are entitled to 40% relief and as an additional rate taxpayer you are entitled to 45% relief. You must claim the extra 20% as a higher rate taxpayer, and the extra 25% as an additional rate taxpayer.
As a reminder:
- You are basic rate taxpayer (20%) on earnings from £12,501 to £50,000
- You are a higher rate taxpayer (40%) on earnings from £50,001 to £150,000
- You are an additional rate taxpayer (45%) on earnings over £150,000
Shockingly, higher and additional rate taxpayers lost £360 million in tax relief in 2016. Do not miss out!
You may need to complete a self-assessment tax return if you are a higher or additional rate taxpayer, if you are self-employed, or if you generate extra income outside of your salary. If you aren’t sure, it’s worth seeking advice or reading around the subject on HMRC’s website.
As of three weeks ago, 4.8 million Brits were still to complete the tax return. Are you one of the people close to missing the deadline?
The key to getting your self-assessment tax return sent on time is organisation. Get your paperwork in order and take the time to fill in the appropriate information.
Some of the key documents you’ll need are:
- Your National Insurance number
- A record of your pension contributions from the last tax year
- A record of untaxed income from the last tax year
- Proof of any income you’ve been taxed on such as your P60 or P45
- Details of Pension or charitable contributions
- Summaries of benefits received from an employer
- Details of expenses
You might want the help of an accountant to help with your self-assessment tax return. If you do choose to do it yourself, you’ll find all the help you need on HMRC’s website.
If you miss the self-assessment tax return deadline, you could be liable to pay fines and charges on your taxes:
- A £100 fee is applied if you file more than three months late, followed by an additional £10 a day up to a maximum of 90 days (£900).
- If you haven’t filed your return after six months, a penalty of 5% of the tax due or £300, whichever is greater, is applied.
- If you still haven’t filed your return after a year, another 5% or £300 charge, whichever is greater, is applied.
- There are additional penalties for paying your tax late of 5% of the tax unpaid at 30 days, six months and 12 months.
For future reference, it may be worth setting a reminder to complete the self-assessment tax return at an earlier date. Amazingly, figures showed that on Christmas Day 2018 there were 2,616 returns filed!
Do more with your money, sort your self-assessment tax return today