We’ve all been enjoying the season to be merry, eat an abundance of food and spend time with family and friends.
Whilst not so popular, and usually un-celebrated, it is also the height of Tax Return Season.
The impending deadline of midnight on the 31st January 2020 is fast approaching for the tax year ending 5th April 2019 and for those of us who have delayed the task of collating the information for our returns, time is of the essence.
Many of you may already be within the self assessment system, and the tax return presents its usual annual homework ready to handover to the accountant in the new year, however, in addition to focusing on the income it is also important to consider if there have been any changes in your circumstances in the year which could lead to additional allowances being available.
For example, marriage allowance, the potential to transfer some of the unused personal allowance between spouses, professional subscriptions paid, gift aid, donations and pension contributions paid. These can provide valuable relief against the tax you will need to pay in January 2020.
Other key considerations include do you have any new sources of income, have you invested in a buy to let property and are now earning rental income, or was a rental property sold in the year, have you starting drawing on your pension, and for those higher rate earners with children has the child benefit charge been considered?
An un-started task is often more daunting than the task itself, however by setting aside some time and identifying what reliefs may be available may even be to your advantage.
Once the tax return has been completed and ready to file, one of the key questions is how much tax will I need to pay? January 2020 will usually be a combination of the balancing payment for the year ending 5th April 2019, plus the 1st payment on account for the year ending 5th April 2020.
The payment on account is based on the previous year’s liability, however if a change in your circumstances for the current year means that you anticipate a decline in your income or an increase in your allowances do speak to your accountant to consider if it would be advantageous to reduce the payments on account accordingly.
If you would like to discuss your personal tax position further, or require assistance with the filing of your personal self assessment return, please do not hesitate to call 01420 83700 or email me on firstname.lastname@example.org.