For most of us, the deadline for submitting our self-assessment tax returns is 31 January 2014. But for some of us, the deadline is a month early – on 31 December. That’s not exactly true, but it could very possibly be beneficial to those with a tax bill of less than £3,000.
If your self-assessment tax return is filed on line by midnight on 30 December 2013 and it shows tax underpaid of £3,000 or less, HM Revenue & Customs (HMRC) will, in most cases, collect the tax you owe through the PAYE system, using your 2014/15 PAYE code number to collect one twelfth of the underpayment from your salary each month.
The cash flow benefit of this is not only that the tax underpaid is not due in a lump sum at the end of January 2014, but also that the potential for payments on account is avoided.
Payments on account are not due if your total tax liability is less than £1,000 or if at least 80% of the total tax due for the year is covered by tax deducted at source. If these conditions are not met then, on a liability of £3,000, as much as £1,500 could be payable at each of the instalment dates in January 2014 and July 2014.
If you have not yet given us the information we need to prepare your Tax Return, why not talk to a member of the team to arrange an appointment and see if you can benefit from this early filing date?
And don’t forget, the penalty regime for late filing of your self-assessment tax return means an immediate penalty of £100 even if the return is only 1 day late, which applies even if you have no tax to pay or have paid the tax you owe, rising to a hefty £1,300 or more penalty on top of any interest and surcharges charged if the Tax Return is filed 6 months late.
If you would like to arrange a free meeting with a Liverpool accountant to discuss personal tax, either at our office or at your premises, please contact us on 0151 380 3800 or by email at [email protected].
Alternatively, you can use our website contact form.
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Added by Jon Davies