Self-Assessment 2017
With the tax return deadline fast approaching, we thought it would be useful to highlight some of the quirks of the self-assessment process.
If you need any assistance completing your return, contact us today for a FREE consultation and fixed fee quotation. All of our engagements include Fee Protection as standard, covering all professional fees in the event of an enquiry by HMRC into your return.
Self-Assessment: 10 things you need to know…
- The tax year end is 5th April not 31st January. You can actually file your tax return on the 6th of April and be done. The 31st is the payment and online filing deadline.
- You can pay your personal tax by credit card! This option is being revoked on the 13th January, however it is still available until then.
- The effective rate of tax for employment income earned between £100k and £122k is 65%! This is the perverse effect of tapering away of the tax free personal allowance when income exceeds £100k.
- You can still claim child benefit throughout the year even if your income exceeds £50k, however you will need register and file a tax return, paying a tax charge if you exceed this amount.
- You can pay your self-assessment tax through your payroll. If you file before 31st October, owe less than £3,000 and you are already taxed through PAYE.
- In most cases, if your employer pays you a mileage allowance that is lower than the statutory 45p to 10,000, 25p >10,000 miles , you can claim a tax deduction on the difference.
- Higher and additional rate tax payers can claim a tax refund on donations made under Gift Aid. As an example, a 40% tax payer donates £100, the charity will claim an additional £25 gift aid (20% relief), the taxpayer can also claim £25 (An additional 20% relief – £125 x 20%).
- Dividend and Rental income contributes towards Student Loan repayment thresholds. We often see that loan repayments are required when a director shareholder first starts to trade. Often Directors are unaware of this and have not provided for this additional cost come 31st Jan.
- It’s not just income reported on a self-assessment, Capital Gains must also be reported, however if you have disposed of any assets in the period and the gain does not exceed the annual exemption (£11,100), you have no require to report.
- Late filing penalties! There is no excuse, or should I say very few excuses. IF you have not filed your tax return by midnight on the 31st January, you will incur an automatic £100 penalty.
The clock is ticking, if you are a Director, have untaxed income or have made a capital gain between April 2016 and April 2017, you may need to file a Self-Assessment tax return.
Contact us today for a FREE consultation and let us take the strain.
