Taxing matters
We’re rapidly approaching the end of the year – and it’s time for us to get out the reminders to submit your personal tax return.
While the actual date is three months away, it really doesn’t make sense to wait until the very last minute. The result is usually inaccurate information being submitted, which ends with you either paying more tax than you need to – or being fined for a shortfall.
Also, if you want to diminish the pain of paying HMRC tax, it’s good practice to take advantage of anything that reduces your tax liability or, at least, makes it a less painful experience.
Did you know that you can spread the payment over the next tax year – as long as you tick the HMRC boxes.
- It is only available if your tax liability is less than £3,000 for that tax year.
- You must pay your income tax through PAYE, either as an employee or through a company pension.
- You must file your tax return by 30th December if filing electronically.
This doesn’t mean that you pay less tax, but it does spread the payment, so your bank account doesn’t get a big shock to its system right after the Christmas credit card bills are paid!
It works because you pay tax via PAYE according to the tax code that HMRC issues. If you’re spreading the liability, they’ll issue a new tax code, so each month a proportion of the amount owed is taken. So, instead of a big lump on 31st January, you pay an amount each month.
There are some criteria to meet:
- You can’t apply for this if the resulting monthly tax deduction is more than double your current tax deduction.
- If you work part-time, you can’t apply for this if the tax deduction totals more than half your pay.
- You will need to tick the option to do this on your online tax return.
You may need to get someone to do the calculations to ensure your forthcoming tax deductions fall within these criteria (unless you’re a maths wizard and are au fait with the tax codes).
Also, remember that the HMRC computer can say ‘No’! It’s not automatic, but it’s worth applying – nothing ventured; nothing gained.
Whether you’re going to apply to spread your tax or not – getting your personal tax return done and dusted before the festive season is always good for your peace of mind too. Get in touch with our expert team for any advice you might need on sorting out your personal tax return.
