More and more people are filling in their tax returns over Christmas, but they need to make sure their returns are accurate or face an extra bill.
People who fill in their tax returns over Christmas should make sure that they have included all taxable items or they could get an extra bill in the New Year.
“The number of people filing their personal tax return over the festive period has been increasing in recent years,” said Nimesh Shah, a tax partner at Blick Rothenberg LLP.
He added: “Last Christmas, HMRC received over 1,500 online returns on Christmas day alone and received over 23,000 online returns in total between Christmas eve and boxing day."
If you decide to file your tax return between your turkey and the Queen’s speech, here are some points to remember:
- Include all the charitable donations you have made during the tax year to claim tax relief. Also, you can include charitable donations you have made after the end of the tax year up to filing your return and carry these back. It is important to remember that you can’t claim for relief for these donations again next year so keep a record of what you have claimed.
- Include relief for any personal pension contributions you have made.
- Include any Child Benefit payments if you are affected by the ‘High Income Child Benefit Tax Charge’ – this will broadly be the case if you or your partner have income over £50,000 and you received Child Benefit payments.
- If you have used your personal car for your employment and your employer has reimbursed you less than the approved mileage allowance payment (45p for the first 10,000 miles and 25p thereafter), you can claim the difference as an allowable deduction.
- If you are a member of any professional institute required for your employment, you can include the cost of the subscription as an allowable deduction.
- If you are self-employed or rent a property, make sure you claim all your expenses but make sure you have a record of all expenses claimed.
- If you have sold any assets and realised a loss, make sure you claim the loss on your tax return. If you don’t claim the loss within 4 years, you can’t then claim it subsequently.
- If you are due a tax repayment, include details of the UK bank account you want the refund to be paid into. Bank repayments are generally issued quicker than asking for a repayment by cheque.
Nimesh comments: “If you don’t file your tax return by 31st
January, HMRC will issue an automatic fixed penalty of £100. If the tax return is three months late, HMRC will start charging daily penalties of £10 per day and these run for a period of up to 90 days, so up to £900 in total.
“After 6 months, HMRC will charge a penalty of 5% of the person’s tax or £300 – whichever is higher. Therefore, within 6 months, you could be facing total penalties of £1,300.”
For more information, please contact Nimesh Shah at email@example.com