Personal tax returns

The benefits of being up to date with your personal tax returns

Most people appreciate the benefits of keeping their tax affairs up to date and in order. They find it useful to have advance warning of the amounts due and to be confident of passing an HMRC check. Many people need some help in keeping up to date.

Personal tax return

We can prepare your personal tax return from the information that you supply. We then calculate your total tax liability. This may be income tax, self-employed national insurance contributions and capital gains tax. We then tell you when and how much you will need to pay.

If you are a taxpayer who has to make instalment payments, we will discuss with you whether is a reason to think that the following year?s instalments are likely to be too high. If so, we can include a claim to reduce the instalments in your tax return.

After you approve your tax return, we will submit the information to HMRC electronically. This has the benefit of an instant confirmation of receipt. If the tax return shows that you are due a repayment, HMRC will normally send this to you within a few days.

Deadline filing and payment dates

As we file tax returns electronically, the deadline date for filing the return is 31 January after the tax year. It would be preferable to file the return much earlier so that you are forewarned of the tax due on 31 January.

The standard tax payment dates are :

1. A first instalment on 31 January in the tax year.
2. A second instalment on 31 July following the tax year.
3. The balance of the tax due on 31 January following the tax year or a repayment as soon as the tax return is filed

If the total tax due for a year is under £2,000, you need not pay any instalments the following year. If you have significant PAYE income, HMRC may collect the tax due by altering your PAYE code for the next-but-one tax year. This has the benefit of spreading the tax due over a longer period

Checking PAYE code numbers

For someone who does not file a tax return, the PAYE code number is important because is sets the amount deducted from a salary or pension. There has been a lot of adverse publicity about HMRC?s new centralised system for issuing PAYE code numbers, which is producing some erratic results.

If someone files a tax return, the PAYE codes are less important because the tax return includes a calculation of the overall tax liability. Nevertheless, it is still worth checking the PAYE code. HMRC have been including estimates of investment income in the PAYE codes and so collecting the tax on that income much sooner than they are entitled to do. When challenged, they always take out the estimates of investment income.

Planning

One of our most satisfying tasks is to help our clients to minimise their tax by giving advice in advance. It is frustrating to see wasted opportunities. There was a recent example of two people who each had a home. When they married, they decided to live in one property and let out the other. After some years, they decided to put the let property into joint names and then sell it. By the time they consulted us, it was too late. We could have told them that putting the property into joint names would be a mistake that would result in an unnecessary amount of capital gains tax.