Tax Returns – the deadline is coming!

A gentle reminder!

As Bonfire Night has now passed, you are no doubt looking forward to the Christmas festivities.

Many clients use the festive break as a time to gather together their Tax Return information in readiness to send to us in January so that we can prepare the Tax Return before the deadline of 31 January 2016. However, this leads to delays in processing the information as many clients wait until the new year to bring us their information which means that our tax team must enforce a first in, first out policy which isn’t ideal when you want to know the amount of any tax due on 31 January 2016. Whilst we have increased our staff numbers in the tax department over recent years to cope with the greater than ever demands for our tax services we unfortunately cannot increase the number of hours in the day!

Please therefore bear in mind that the earlier we have the information, the sooner you will receive your Return and the earlier you will be aware of any tax payment due on 31 January 2016. In addition, you will have the full gratitude of our tax department for helping reduce the pressures of January!

Should I complete a Tax Return?

If you are not sure whether you are required to complete a Tax Return, the list below sets out when HMRC will expect you to complete one.

If you meet one of these criteria and have not registered for Self Assessment, then you should do so now by calling us immediately.

HMRC advise that you should complete a Self Assessment Tax Return if:
  • You are self-employed or a partner in a partnership.
  • You receive other untaxed income – such as rental income, gross bank interest etc.
  • Your savings or investment income (before tax) is more than £10,000.
  • You made a gain from the sale of a second home, buy to let property, shares or other assets subject to Capital Gains Tax.
  • You are a company director.
  • Your income (or your partner’s) is over £50,000 and one of you claimed Child Benefit.
  • You have income from overseas that you needed to pay tax on.
  • You live overseas and receive UK income.
  • You receive dividends from shares and you are a higher or additional rate taxpayer.
  • Your total income is over £100,000.
  • You are a higher rate taxpayer and wish to claim additional tax relief for pension contributions and gift aid donations.
  • You wish to claim certain job related expenses.
There may be other circumstances which may necessitate the completion of a Tax Return and you should check your particular circumstances with our tax team.

ADVANCE WARNING - It is likely that many individuals not currently completing a Tax Return will be required to complete Tax Returns from 2016/17 onwards, particularly those with interest income of over £1,000 or dividend income over £5,000 due to the tax changes announced over the last year. We would recommend that you seek our advice now to ensure that you comply with your tax obligations going forward.

What happens if I don’t complete a Tax Return?

Assuming that you have an obligation to complete a Tax Return and don’t submit this to HMRC by the deadline – usually 31 January after the end of the particular tax year – then HMRC may charge late filing penalties.

The filing deadline can differ from 31 January if:

a) you file your Tax Return by post to HMRC, in which case this needs to be with HMRC by 31 October after the tax year or;

b) HMRC issued your Tax Return after 31 October (following the end of the tax year) in which case you have three months to deliver your Return.

The current penalties for late filing are:
Late filing Penalty
After filing deadline £100
3 months late Daily penalty of £10 per day for up to 90 days
6 months late Greater of 5% of tax due or £300.
12 months late Greater of 5% of tax due or £300.

In addition, there are further penalties where the taxpayer deliberately withholds information from HMRC or makes late payments of tax.

It really does pay to ensure that you comply with the law as a 2015 Return filed after say 31 July 2016 could lead to at least £1,300 of penalties.

As ever our tax team are here to help. For Darlington call Alan Moore or Lee Watson (01325 349700), for Durham call Nicola Bellerby or Lee Watson (0191 384 2244) and for York call Alan Moore or Graham Richardson (01904 784400).