Posts Tagged ‘Self Assessment’

Affected by severe weather or flooding

Tuesday, January 17th, 2017

It is unfortunate that HMRC have designated the 31 January as the filing deadline for self-assessment purposes as we are more likely to be adversely affected by extreme weather events at this time of the year.

There are not many businesses that can continue to trade if their premises, equipment or stock have been affected by severe weather, particularly flooding.

How do you manage your cash flow if your business records are destroyed or if you are unable to use stock or equipment ruined by water damage?

Readers affected will take some comfort from a recent announcement by HMRC. They have set up a helpline where you can get practical advice and help on tax issues you may be experiencing as a direct or indirect result of severe weather. HMRC will also:

  • agree instalment arrangements where taxpayers are unable to pay as a result of severe weather or flooding
  • agree a practical approach when individuals and businesses have lost vital records as a result of severe weather or flooding
  • suspend debt collection proceedings for those affected by severe weather or flooding
  • cancel penalties when the taxpayer has missed statutory deadlines

The helpline is 0800 904 7900. The line is open seven days a week: Monday to Friday 8am to 8pm, and weekends 8am to 4pm. The line will not be open bank holidays.

When do you need to register for self-assessment

Thursday, January 12th, 2017

We are fast approaching the end of the 2015-16 tax return filing period – returns for this year should be filed electronically by 31 January 2017.

If you are not registered for self-assessment you may be wondering if you should consider registering for 2016-17. We have listed below HMRC’s list of who should be submitting a tax return:

  • you were self-employed – you can deduct allowable expenses
  • you got £2,500 or more in untaxed income, for example from renting out a property or savings and investments – contact the helpline if it was less than £2,500
  • your savings or investment income was £10,000 or more before tax
  • you made profits from selling things like shares, a second home or other chargeable assets and need to pay Capital Gains Tax
  • you were a company director – unless it was for a non-profit organisation (such as a charity) and you didn’t get any pay or benefits, like a company car
  • your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit
  • you had income from abroad that you needed to pay tax on
  • you lived abroad and had a UK income
  • you got dividends from shares and you’re a higher or additional rate taxpayer – but if you don’t need to send a return for any other reason, contact the helpline instead
  • your income was over £100,000
  • you were a trustee of a trust or registered pension scheme
  • you had a P800 from HMRC saying you didn’t pay enough tax last year – and you didn’t pay what you owe through your tax code or with a voluntary payment

Certain other people may need to send a return (for example religious ministers or Lloyd’s underwriters) – you can check whether you need to. You usually won’t need to send a return if your only income is from your wages or pension.

Once registered, you must file your return even if you have no tax to pay. There are penalties payable if you are required to file a return and do not do so by the required filing deadline. The deadline to file a 2016-17 tax return will be 31 January 2018.

Tax Diary November/December 2016

Thursday, November 3rd, 2016

1 November 2016 – Due date for Corporation Tax due for the year ended 31 January 2016.

19 November 2016 – PAYE and NIC deductions due for month ended 5 November 2016. (If you pay your tax electronically the due date is 22 November 2016.)

19 November 2016 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2016.

19 November 2016 – CIS tax deducted for the month ended 5 November 2016 is payable by today.

1 December 2016 – Due date for Corporation Tax due for the year ended 29 February 2016.

19 December 2016 – PAYE and NIC deductions due for month ended 5 December 2016. (If you pay your tax electronically the due date is 22 December 2016)

19 December 2016 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2016.

19 December 2016 – CIS tax deducted for the month ended 5 December 2016 is payable by today.

30 December 2016 – Deadline for filing 2015-16 Self Assessment tax returns online to include a claim for under payments to be collected via tax code in 2017-18.

Sooner or later

Monday, July 4th, 2016

Is it better to file your Self Assessment tax return as soon as possible after the end of the tax year?

You are not obliged to file your tax return for 2015-16, online, before the 31 January 2017. However, if you leave the process of completing your return until close to this date, it will not give you much time to calculate and fund the amount of tax you may owe on the same date, 31 January 2017.

When we prepare a Self Assessment tax return for clients there are four distinct phases:

  1. Gathering the information from clients to complete the return.
  2. Completing the return and considering any explanatory narrative.
  3. Agreeing the submission with our clients, and
  4. Filing the return.

It makes good sense to move through the first three phases as quickly as possible after the end of the tax year. For the 2015-16 year, it should be possible to collect and process the relevant data by midsummer, say 31 July 2016. Clients who facilitate this sort of timetable should then be in a position to know what their balance of tax owing (or tax overpaid) is several months before the 31 January 2017 filing and payment deadline.

It is possible to delay the actual filing of the return to any date up to and including 31 January 2017. There may be good reasons for doing this. For example:

Higher rate tax payers have an opportunity to carry back gift aid donations to the previous tax year. In order to do this, they must pay the donations and include the appropriate election before they file the tax return for the tax year they are carrying back to. I.e. in order to secure extra tax relief for 2015-16, the gift aid donations made after 5 April 2016 must be completed before the 2015-16 tax return is filed.

On the other hand, self-employed business owners whose profits have been falling during 2015-16 (compared to 2014-15) may find that the actual tax and NIC that is due is less than the payments on account being made 31 January 2016 and 31 July 2016. If this is highlighted by completing the return early in the tax year, an application can be made to reduce the second payment on account due 31 July 2016.

Readers should also note that HMRC have 12 months from the date they receive your return to raise enquiries regarding the return. Early filing starts the enquiry “clock” ticking sooner.

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