Seven secrets of a last-minute tax return
- Your self-assessment tax return is due by midnight on 31 January, covering the tax year running from April 2023/April 2024.
- By 6 January, 5.4 million tax returns were still outstanding.
If you’re rushing to complete your tax return, there are seven secrets you need to know. These will help you to do a fast and accurate return.
“When it comes to miserable January jobs, doing your tax return is up there with recycling the Christmas tree and writing thank you cards. Nobody really relishes the thought of buckling up for a job that’s at once boring, complicated and expensive. Fortunately, if you’re dreading the task, there are some secrets to getting through it in one piece.
Sarah Coles, head of personal finance, Hargreaves Lansdown
The other key is to give yourself ten extra minutes after sending your return. This time allows you to see if you can make life easier. It also helps you see if you can make life less expensive next time round. If you spent ages digging out details of dividends, consider using a stocks and shares ISA. You should also consider it for profits on share sales. Or, if you ended up paying tax on either of them, consider using a stocks and shares ISA. This will protect your investments. It will also prevent you from ever having to bother with them on a tax return again.
Demolish the obstacles that could trip you up later.
This covers the mechanics of completing and submitting the form. You need your Unique Taxpayer Reference number. You also need access to the Government Gateway. If you haven’t registered for self-assessment, register now. Your UTR will take up to ten days to reach you by post. It will take up to ten days for your activation code to get to you, too. If you’ve forgotten or lost any of these things, you can recover them, but get it sorted now.
Claim for everything, but don’t make it hard for yourself.
Collect all your receipts and invoices. Use the list on the government website to check you haven’t missed anything. It’s a big job, so make sure you cut any corners you can. If you work from home, calculating your actual usage might be difficult. The same issue arises if you use your own car for work. Instead of working out your expenses, you can use flat rates for both.
Don’t panic if there’s no time to get hold of paperwork.
If you’ve left it too late. You can submit an estimated return and update it when the paperwork arrives. You’ll need to complete the section on the form to show estimates have been used.
Take your time over pensions.
This is a common area for mistakes. Higher rate taxpayers need to check if they have to claim for extra higher rate relief on their pensions. If it’s not instantly clear, they can check in with their employer. Their employer can explain how the workplace pension works. They can also clarify whether it needs to go on the tax return. If it does, they need to make sure they enter the gross value of contributions. This isn’t just a total of all the money paid in. It’s everything they paid in, plus tax relief at 20% on top.
Consider the impact of frozen tax thresholds.
If a pay rise pushed you over the income tax threshold, you might start paying higher or additional rate tax. The extra tax on your income may have been taken through the PAYE system. However, it may also mean you need to complete a tax return. You might need to reclaim tax on pension contributions. This could also apply to charitable donations. Additionally, you may need to pay tax on your savings because your personal savings allowance has dropped.
Go back and check it.
Make sure you’ve completed every relevant section and enter all the details. If you’re unsure of something, check the rules on the HMRC website. This year, the HMRC self-assessment helpline won’t offer any help with queries it feels can be solved easily online. Unless you’re a vulnerable customer, so start online. Even when you’re feeling the pressure, take a few minutes on the website now. It will save you an awful lot of worry later.
Don’t forget to pay.
You’d be surprised how many people are so focused on the admin that they forget this bit. If it’s not a case of forgetting, and you can’t afford the bill, don’t let this put you off. You can do the return now and arrange to pay in installments – through a time-to-pay arrangement. There will be interest payments on top of the tax bill, but it’s going to be cheaper than the fines you can rack up for missing the deadline.”
