Tax Returns deadline – have you done yours?
This month, Darren Stone, partner at Leon and Company Chartered Accountants writes about the upcoming tax return deadline and what is involved.
It’s that time of year again. And I don’t just mean the festive season! Most accountants are now getting busy for the upcoming deadline for submitting self-assessment tax returns for the year-ending 5 April 2017. Notwithstanding the changes on the horizon with the much publicised ‘Making Tax Digital’, which promises to change how we report our income, most of us still file online – and we have until 31 January 2018.
So, do we have to file a tax return? In the main, it is for those of us with non-standard income, including reporting our annual business results from self-employment or a partnership, reporting capital gains (e.g. the “profit” on the sale of a rental property), dividends, trust income, property rentals less qualifying expenses (you can still claim full mortgage interest for one last year only, but please note that wear and tear allowance was abolished from last year!), bank and building society interest received, taxable foreign income, etc. This income, for the period ending 5 April 2017, needs to be reported in our tax returns alongside regular income taxed at source, such as regular PAYE and pension income.
We should also report what private pension contributions we have made during the year, along with any charitable donations made under Gift Aid (possibly including annual synagogue subs!). This is particularly relevant if you are a higher-rate tax payer as you can get some tax relief on these payments. We should also disclose any Child Benefit received where our income is over £50k, and also disclose if a student loan is still being paid off.
The bottom line is that if any of the above applies to you, and you are not already completing a tax return, then you may very well have to register as soon as possible.
The last point to make is if we submit our tax return just one day late, then we incur an automatic £100 penalty, with an increasing penalty scale the longer we leave it. There is also a separate regime of penalties for paying tax late as well. So, a late tax return, and late payment can be even more costly!
If you would like more information on whether you should be registered, then we would be delighted to have a chat. In the meantime, enjoy those festivities…