Filing Tax Return Early

Time flies –  5 reasons you should file your tax return early

 

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Can you believe that we are already over 1 month into the start of the new 2017/18

tax year? The saying ‘time flies’ has never been truer. Unfortunately, that

means we are also 1 month closer to the filing deadline for our 2016/17 tax returns

and you may have already received your annual reminder from HMRC.

Tax returns dated 06 April 2016 to 05 April 2017 are due for electronic filing no later

than 31 January 2018, the penalty for late submission (up to 3 months) is currently

£100.

We are all tempted to brush our accounts and tax returns to the side whilst we

concentrate on the running of our businesses day to day… after all, it is the easy

option BUT I am sure you can agree there is always that one niggle in the back of

your mind that gets bigger and bigger as we get closer to the 31 January deadline.

Wouldn’t it be lovely to have a stress-free couple of months knowing you are all up

to date?

As a business owner, and it has taken me a long time to realise this myself BUT

sometimes we have to give ourselves a break. Instead of feeling stressed and

anxious for 9 months wondering what your tax return will be, why not do it now and

release yourself of that tension? Your mind will feel much better for it allowing you to

concentrate on more important things like business plans for future growth. I like to

think a clear mind is an exciting mind.

If that doesn’t tempt you here are a few further advantages of filing your tax returns

early

Cashflow –

So you are in a position where you do have a tax liability payable to

HMRC, by preparing and filing your tax returns sooner rather than later you are

giving yourself more time to plan, save and budget your cashflow accordingly (and

no last minute surprises). The payment deadline will remain at 31 January– It will not

trigger an earlier payment date and maybe depending on individual circumstances

you might even be able to have any tax due collected via PAYE through an adjusted

tax code (providing your tax return has been filed by 31 December).

If you are lucky enough to be due a tax refund, the sooner you file the tax return, the

sooner you will receive the amounts due, you do not have to wait until the 31

January before repayments are released. HMRC are fairly reasonable and refunds

tend to get repaid in a matter of weeks upon receipt of the tax return.

 

ivy wood, mums tax break, accountants, accounting, tax return, self assessment, tax return help, bookkeeper

Time –

By preparing and filing your tax return early you are effectively creating

yourself more time to gather all of the necessary information required instead of

rushing around last minute ploughing through draws, cupboards, piles of paper,

carrier bags, etc. There is also less time to lose important documents and forget

what happened that 1 day back in April 2016 that your accountant is now querying

with you.

It will also give your accountant more time to identify and investigate any errors and

or discrepancies within your accounting records.

Tax Credits –

If you are currently in receipt of tax credits your deadline for renewal is

31 July. Although at this date you are able to provide HMRC with estimate figures

wouldn’t it be much more efficient to be able to give them actual figures?

By providing HMRC with actual figures you can ensure you avoid the HUGE

overpayment/underpayment scenario.

It is also worthwhile remembering if you do see a sudden change in your income

throughout the tax year to inform them as this can also have an impact on your

current claim.

HMRC Enquiries –

HMRC currently have 12 months from the date you file your tax

return to raise any queries they may have. The sooner the return is filed, the sooner

this period will close. Which goes back to my initial point, an HMRC return can be straining,

the sooner the 12 month period has passed the sooner your mind can be at ease.

Of course, I’m sure everything will all be OK if you are chosen by HMRC, especially if

you have the helping hand of a reliable accountant.

So what are you waiting for? – Get in touch today to see how we can help you.

Save tax with the marriage allowance? – Yes please!

Save tax with the marriage allowance? – Yes please!

Happy Valentine’s Day from everyone here at Mums Tax Break!

 

The 2015/16 tax year introduced us to the marriage allowance – Meaning that if you are a married couple and one of you earned less than the personal allowance of £10,600 you were eligible to transfer 10% of your unused allowance to your partner saving them £212 in tax.

 

I think I had maybe 4 or 5 clients who were able to take advantage of this, £212 doesn’t seem like a lot but hey its better than nothing (and it definitely covers the costs for a romantic valentine break away)!

 

So… Can I Claim?

You as an individual are eligible to apply for the marriage allowance (for the 2016/17 tax year) if the following conditions apply

–          You are married or in a civil partnership

–          You have an income of less than £11,000

–          Your partner has an income between £11,001 and £43,000

 

And… How much will I receive?

Personally, you as an individual won’t receive anything, instead your partner will receive the benefit.

The marriage allowance (for the 2016/17 tax year) will allow you to transfer £1,100 of your personal allowance to your partner. This will see a reduction in their tax payable of £220.

There are 1 of 2 ways your partner will receive this reduction

–          Through change of tax code if your partner is in employment, meaning they will pay slightly less tax each pay date

–          Via the self-assessment tax return if they are self-employed, meaning they will pay less tax at year end

 

…Is it easy to do?

Depending on your personal circumstance there are 2 ways you can claim for the marriage allowance

–          If you are self-employed you can easily do this via your self-assessment tax return by providing your partners personal information – Full name, date of birth, NI number, address and date of marriage

–          If you are employed or unemployed you can complete the online application over on the HMRC website – Apply for Marriage Allowance Here!

 

…What if my income increase?

If your circumstances are to change and you are no longer eligible to claim the marriage allowance you or your partner can cancel online via the HMRC website.

 

Ahhh I didn’t know about this! Have I missed out for last tax year?

Good news – No you haven’t! You can backdate the claim using the link above, even better news as the 2015/16 tax year has now passed instead of reducing your partners tax code HMRC will instead send you a cheque for the £212.

 

Just one last little point

The marriage allowance is a set transfer currently at 10% of the personal allowance for 2016/17. This means regardless of income levels you can only transfer £1,100.

If your income is above £9,900 you will trigger a small tax liability payable to HMRC as your personal allowance will be reduced to this amount after the transfer. Any profits above this amount will be taxable at 20%.

It is therefore always worthwhile discussing matters with your accountant before you consider making a claim.

 

 

Are you doing anything lovely to celebrate valentine’s day this year? Please share the love in the comments and tag your beautiful brides <3 <3