In this blog, Darren Stone partner at Leon and company writes about the upcoming tax return deadline and what is involved.
It’s that time of year again. And we 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 2019. 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 once-a-year using an online form – and we have until 31 January 2020.
So, which of us have to file a tax return? In the main, it is for those of us with non-standard income, which covers our annual business results from self-employment or partnership, reporting capital gains (perhaps the “profit” on the sale of an investment property), dividends, trust income, property rentals less qualifying expenses (although be careful with mortgage interest as the rules have significantly changed!), bank and building society interest received, taxable foreign income, etc. This income, for the period ending 5 April 2019, needs to be reported in our tax returns alongside regular income taxed at source, such as regular PAYE and pension income.
We should also disclose what private pension contributions we have made during the year, along with any charitable donations made under Gift Aid. This is particularly relevant if you are a higher-rate taxpayer as you can potentially qualify for additional tax relief on these payments. We should also disclose any Child Benefit received where our total income is over £50k in the year, and also disclose if a student loan is still being paid off (although be careful as there are certain student loans do not need to be reported).
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 fine, 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, the bottom line is to get your tax return in on time and don’t forget to then pay any tax by 31 January to ensure you don’t get stung with any of those unwanted penalties!
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…