For the majority ofUK taxpayers, tax is something they don’t have to think about too much. It simply gets removed from their pay packets in the shape of PAYE.
But for roughly 11.5 million others,c ompleting a self-assessment tax return and sending it to HMRC is a very pressing need indeed.
Here’s a list of people who are legally required to file a self-assessment tax return:
- Self-employed, business partners, directors of limited companies
- Those with a pre-tax annual income of at least £100,000
- Anyone with a pre-tax investment income of at least £10,000
- Ministers of religion
- Trustees or representatives of someone’s estate
- Lloyds of London ‘names’
Before we dive into the dates you need to know for 2019-20, let’s remind ourselves about what constitutes self assessment.
What is self assessment?
Self Assessment is how you report your income, gains and expenses to HMRC in any given tax year. You fill out a tax return, either on paper or online, calculate your tax liability and send it to HMRC (The online version does the sums automatically.)
The big news is that the government is aiming to phase out tax returns over the coming years. In their place, we’ll get a mainly digital system known as ‘Making Tax Digital’.HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world.
If you’re registered for VAT and have a taxable turnover higher than the VAT threshold (currently £85,000), you must use the Making Tax Digital system to submit your VAT returns from 1 April 2019.
Self assessment filing dates
Don’t confuse the deadlines for submitting tax returns under self assessment with the tax-year end. You must complete a tax return by 31st January after the end of the tax year if you’re doing it online.
Alternatively, you’ll need to submit a paper one by the previous 31st October. If HMRC issues you with a tax return from a previous tax year, you’ve got three months to respond from the date it’s issued.
When does the 2019-20 tax year start?
TheUK tax year is distinct from the normal calendar year. It’s also referred to as the financial year.
The current tax year will end on 5 April 2019. The next tax year will begin on 6April 2019 and end on 5 April 2020. In between those two dates are a whole host of key milestones. Knowing these dates will help you budget for the year and ensure you hit all your tax deadlines.
Do not miss those tax deadlines
Miss those deadlines and you could find you’ve missed out on money you’re owed or you could even be subject to penalties.
If you submit your tax return even a day late, HMRC will impose a £100 penalty. If you’re up to three months late, you’ll be hit with £10 for every extra day (capped at 90 days), plus the initial £100 fine. So that’s a possible £1000.
Should you let your return drift by six months, you’ll need to cough up the higher of£300 or 5% of what’s owing. And that’s on top of what you’ve already paid. And if you’re a year late, you can tack on another £300 fine or 5% of the tax due.
Any other tax payments due?
- VAT returns are payable each quarter.
- Capital gains tax (CGT) — large companies must make payments on account in months seven and ten of the accounting period, plus months one and four in the year after. Although CGT can now be made in real time.
- CGT — very large companies are liable for payments in months three, six, nine and twelve of the accounting period.
- CGT — other companies must pay within nine months and one day of year-end.
- VAT — online returns are due one calendar month and seven days after the VAT period ends.
- Construction Industry Scheme returns are payable 14 days after each tax month ends.
Are you due a tax rebate?
Every year, it’s always a good idea to put another date in your diary and use the day to explore the possibility of a tax rebate. That’s unless you love paying tax, of course.
Here are a few things to consider:
Uniforms and workwear
Washing uniforms incurs costs. So HMRC is happy to pay you an allowance. What you’ll get varies by industry, but you could be in line for as much as £1,000. For a higher-rate taxpayer, that’s £400.
Tools and equipment
Need to provide tools or equipment? Chefs need knives, scaffolders need scaffolding and gin distillers need stills. You can claim all this back against taxes. Just keep your receipts or even photos of receipts.
Professional subscriptions
Membership of professional bodies can keep you in the loop about developments in your sector and make you look more professional. But they come with subscriptions.Fortunately, you can claim tax relief on those, too. Check HMRC’s list of around 3000 ‘approved professional organisations’.
Gift Aid
Making a donation to a charity using Gift Aid allows them to claim 25%back. But if you pay more than the basic rate of tax, you can claim money back.You’ll be entitled to the difference between the tax you actually pay and the basic rate on the donation.
The same system applies if you live in Scotland.You can do this either:
Let’s say you give £100 to charity. The charity then claims Gift Aid, which makes your donation £125. As you pay 40% tax, you can personally claim back £25 (£125x 20%).
Pension contributions
If you pay into a personal pension, your provider automatically gets 20% tax relief on what’s paid, which is added to your pension. But if you’re a higher-rate taxpayer, you’ll be entitled to 20% of 25% of your contribution.
Multiple jobs
For those of you in a PAYE job who have more than one employer, it’s worth checking if you’re paying too much tax.
Each employer won’t know about the income you get from the other employers or what tax you pay. The usual course of action is for your main employer to use your tax code. The other employers deduct tax at 20% before you receive your pay.
That’s great if you earn over £12,500 from your main employer. If you earn less, you’ve probably paid too much tax on your other sources of income.
HMRC error
Okay, so this is a rare event indeed, but HMRC can actually make a mistake and issue you with the wrong tax code.Be aware, though, that HMRC won’t tell you about this. It’s down to you to spot the error and get it put right.
Now, open up your calendar and make sure you never miss a key tax date again. And good luck with those rebates.
