This is a guest post by Jill Hindmarsh from Allen Sykes Ltd.
As we approach the 31st of January, millions of taxpayers have yet to file their self-assessment return for 2016/17. If you are one of them, here are some tips we hope you find helpful:
Don’t put it off any longer!
We all put off the things we don’t like doing. Even accountants don’t enjoy filing tax returns. Honest. The reality is the deadline won’t go away, so diary some time to do your return and don’t procrastinate. Make sure you know where your login details are, and if you need to apply for an authentication code do that ASAP as it will need to be posted to you. If you have an accountant, get all your papers to them now. You are not the only client who hasn’t filed so they will be busy.
Have everything you will need to hand before you start, such as P60s, interest certificates and dividend details. Whilst you’re doing that, put anything you need for the current tax year in a separate folder or envelope to make the job easier next time. Every time you are sent something which you will need for your return put it straight in the envelope.
Don’t overlook the marriage allowance, if it applies to you. Marriage Allowance lets you transfer £1,150 of your Personal Allowance to your husband, wife or civil partner – if they earn more than you. This reduces their tax by up to £230 in the tax year (6 April to 5 April the next year). To benefit as a couple, you (as the lower earner) must have an income of £11,500 or less.
You can get Marriage Allowance if all the following apply:
- you’re married or in a civil partnership
- you don’t earn anything, or your income is £11,500 or less
- your partner’s income is between £11,501 and £45,000
Is your business making a loss?
If your sole trader business has made a loss, and this isn’t unusual in the early years, don’t ignore the loss. Calculate the loss, as you can set it against other income in the same tax year or previous tax years. Typically, this can generate a very welcome tax refund. At the very least, you can carry losses forward against future profits.
Child benefit and higher rate taxpayers
Although the rules changed in January 2013, this still catches people out. You may have to pay a tax charge, known as the ‘High Income Child Benefit Charge’ if you have an individual income over £50,000 and either you or your partner get Child Benefit.