It’s meant to be a time of good cheer, relaxation and celebration, but for many, Christmas is stressful, not least for those self-assessment taxpayers, including many private landlords, who have not yet prepared their account for their 31st January tax bill.
But for those of you who are organised, a cash flow benefit could be achieved by getting your tax return in early, according to Blick Rothenberg.
Paul Haywood-Schiefer, a tax Manager at the accounting, tax and advisory practice, explained: “For those completing tax returns under self-assessment, there is always a tendency to leave everything to the last minute, but by getting your return submitted to the Revenue by the 30th December, those with liabilities under £3,000 might be able to get this collected through their tax code and spread the payment, rather than paying a lump sum in January.
“There are some basic conditions for this to apply, which are that, the return is filed by 30 December 2018, the tax due is below £3,000, you already pay tax through PAYE either as an employee or on a pension, and that your income through PAYE is sufficient to collect the tax without you paying over more than 50% of your PAYE income in tax or paying twice as much tax as you normally do.”
The real benefit with this is the spreading of the tax payment.
Haywood-Schiefer added: “An important thing to remember with this though. If you do it, then when you come to complete your Tax Return next year, you will need to include the amount of tax that was collected through your tax code on that form. Otherwise your tax calculation will probably show a repayment, and you might think next year’s Christmas has come early!"
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We have had since april to do out tax returns, mine is normally in by june, agreed, all done and i know how much tax i'm going to pay in the next year.
I do my accounts early but don't submit them until mid January and pay the tax during the same log on. No point in giving HMRC information too early and inviting an enquiry when they've nothing better to do with their time.
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