Tax Return Considerations - January 2018
5th January 2018
The deadline to file your online self-assessment tax return for 2016-17 is 31 January 2018 – and failure to do so can be very costly.
Penalties for late returns start with an initial fixed penalty of £100 – which applies even if there is no tax to pay, or if the tax due is paid on time. Beyond this, penalties increase depending on how late the tax returns are and after a 12-month delay will be at least £1,600.
So, it’s incredibly important you don’t miss these deadlines.
These penalties may be waived if you can provide a genuine and valid reason for the delay. However, this is rare and generally only granted in extreme circumstances – although this doesn’t stop some people trying to avoid a fine with an excuse. HMRC make it quite clear that your dog eating your tax return or your internet connection failing are NOT acceptable, and do encourage you to get in touch with them if you fear you may miss the deadline.
Who needs to fill in a tax return?
In general, if you are self-employed, or have PAYE income but earn money from another source, you will need to complete a self-assessment return. Other earnings can include any profits made from activities such as eBay sales or letting out your spare room on Airbnb – income such as this is all potentially taxable.
There is also a relatively new category of people who have to do a return. If either you or your partner’s income is more than £50,000 and one of you claimed child benefit, then you must do self-assessment.
The full list of those who need to do a tax return is provided here:
Pensions – tax relief
This is also the time to use your tax return to claim back any higher or additional rate tax relief you are entitled to on pension contributions you have made during the year. Remember to include any pension contributions you made in the 2016/17 tax year (6 April 2016 to 5 April 2017). If you are a 40% or 45% taxpayer, it could significantly reduce your tax bill.
Your pension provider should be able to provide you with a statement confirming the amount you have contributed – this value then needs to be entered in the 'Tax Reliefs' section of your tax return.
If you've already completed your return online and didn't claim your tax relief, you can log back in and amend it before 31 January. Alternatively, you may be able to do it separately through your tax office.
If you don’t, you could lose what is due to you and end up paying more tax than is necessary.
Don’t be late!
January 31st is only a few weeks away. So, if you haven’t already done so – and unless you have a very good excuse - start getting your tax return ready.
If we can be of any assistance in this area, please do not hesitate to contact us.