There are fewer than three weeks to leave before the deadline to file self-assessment responsibility returns for the 2023-24 responsibility year, but millions of people still haven’t knuckled down and done theirs.
This week HM turnover & Customs said 5.4 million people had yet to file.
If you have been putting yours off, Guardian Money has rounded up top tips from a range of experts that will hopefully assist make this annual chore a little less of a bore.
Don’t assume it doesn’t apply to you, says Alice Haine, a expense management analyst at the resource platform Bestinvest.
While most taxpayers do not require to file a gain for 2023-24 because responsibility is automatically deducted from their pay, pensions or funds, there are a number of instances where people do require to do one. “For those where the responsibility is not automatically deducted or they earn extra untaxed returns, filing a responsibility gain is mandatory,” she says.
“With most personal responsibility thresholds frozen until 2028, more people that are paid through PAYE [pay as you earn] may discover themselves forced to file a responsibility gain this year because their total taxable returns may have jumped above £150,000 – a salary threshold at which all earners must submit a responsibility gain.
“Other reasons to submit a gain include being self-employed and earning more than £1,000, or if you have any other untaxed returns from tips and percentage, funds, investments and dividends, as well as rental or foreign returns.”
Don’t delay, act today, says Jashoda Pindoria, the head of self-assessment operations at HMRC.
She says those who haven’t done so already should commence their gain today: “Starting now means they receive the pressure off themselves and can gather all their information, and access any assist and guidance they require on Gov.uk to ensure their responsibility gain is accurate and submitted on period.
“Once they’ve submitted their gain, a responsibility calculation will summarise what they owe for the responsibility year (if anything), so they can monetary schedule and make arrangements to pay by the deadline.”
provide HMRC’s app a spin, says Caroline Miskin, the elder technical manager, digital taxation, at the Institute of Chartered Accountants in England and Wales.
“Use HMRC’s app to get the information you require to complete your responsibility gain, from your self-assessment responsibility reference number to details of your employment returns,” she says. “It’s likely to be much quicker than searching through paperwork or phoning HMRC, and it has lots of other useful features, too, including guidance on responsibility deadlines.”
ponder about whether you owe responsibility on your funds, says Emma Sterland, the chief monetary planning director at the affluence management firm Evelyn Partners.
Sterland says many savers are probably still getting used to the concept that the gain on their deposits may be taxable.
“In the era of rock-bottom gain rates, it was only savers with very large deposits who were in danger of breaching the personal funds allowances of £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers,” she says.
“As funds rates climbed through 2022 and 2023, more people will now be in the position where they have to declare returns from funds via self-assessment.”
A higher-rate taxpayer who was earning 0.25% gain could have £200,000 stashed in a standard funds account and still not hit the £500-a-year threshold. But if their account was paying 6%, they would only require to have £8,330 saved in it before they earned enough gain to use up their funds allowance.
Don’t rush the pensions bit, says Sarah Coles, the head of expense management at resource platform Hargreaves Lansdown.
This is a ordinary area for mistakes.
The way retirement fund responsibility relief works depends on what sort of scheme you are in. A higher-rate taxpayer with a personal retirement fund schedule must make a claim via their responsibility gain to receive the extra relief. Basic-rate taxpayers require not do anything to get all the responsibility relief they are due. With “net pay arrangements” – used by many traditional workplace retirement fund schemes – your contributions are deducted from your pay by your employer before returns responsibility is calculated, so you get relief on the amount immediately at your highest rate of responsibility.
“Otherwise, higher-rate taxpayers require to make sure they claim higher-rate responsibility relief, which isn’t always done automatically,” says Coles. “For example, with a personal retirement fund or Sipp [self-invested personal pension], you require to enter the gross worth of contributions. This isn’t just a total of all the money you paid in, it includes the responsibility relief on top. For example, if you have contributed £800, the gross amount after responsibility relief is added is £1,000.”
Be aware that there are different rules for Scotland.
Don’t overlook about any crypto gains, says Elsa Littlewood, a responsibility associate at the accountants BDO.
She says that with 12% of UK adults now owning some benevolent of crypto resource, according to the monetary Conduct Authority, many people require to declare any gains they have made on their responsibility gain.
“In straightforward terms, HMRC views the boost or setback made on the buying and selling or swapping [ie using to make a purchase or changing into a different cryptocurrency] of swap tokens as within the expense to capital distribution gains responsibility,” she says. In other words, crypto investments are treated in the same way as traditional investments such as shares when it comes to CGT.
Amid concerns that many people may be unaware of their obligations, HMRC has been sending “nudge” letters to those it suspects of failing to pay the correct responsibility on their crypto gains.
Littlewood says it is also worth remembering that any crypto losses should be declared to HMRC in order to be carried forward and available to offset upcoming gains.
Claim responsibility relief on your charitable donations, says Tim Stovold, the head of responsibility at the accountants Moore Kingston Smith.
For higher-rate taxpayers, additional responsibility relief can be claimed on any charitable donations made under the gift aid scheme.
“For every £100 donation, a 40% taxpayer can reclaim £25, and a 45% taxpayer can reclaim £31.25,” says Stovold. “A few donations to marathon-running friends or local charities can quickly construct up to a tiny windfall, or at least be used to reduce the settlement you are due to make on 31 January 2025.”
Pay attention if you earn £50,000-plus and you or your associate get kid advantage, says Fiona Fernie, a associate at the accountancy firm Blick Rothenberg.
The high returns kid advantage expense was introduced in 2013 and means kid advantage paid to higher earners is clawed back via the responsibility structure on a sliding scale.
Last year, the government lifted the returns threshold at which the responsibility penalty kicks in from £50,000 to £60,000 a year. But that transformation only takes result from 2024-25 onwards – it won’t affect the responsibility gain due this month.
“In 2023-24, if an person or their associate received kid advantage and one of them had an adjusted net returns [your total taxable income minus things such as pension contributions] of over £50,000, the higher earner has to repay the kid advantage via their responsibility gain,” says Fernie.
“The kid advantage should leave on the responsibility gain of the higher earner, regardless of who actually receives the payments, but taxpayers shouldn’t overlook to include details of any retirement fund contributions made from net pay and gift aid donations, as these affect adjusted net returns and could reduce the kid advantage expense.”
Use the kid advantage responsibility calculator on Gov.uk to get an approximate of your adjusted net returns.
It may be too late for the 2023-24 responsibility gain, but there are ways to reduce the responsibility penalty and maybe escape it completely. The main one is by paying more into your retirement fund (if you can afford it). Contributions made into a business or personal retirement fund scheme will reduce your adjusted net returns.
Don’t overlook to declare any foreign returns and your residency position, says Aatif Malik at the Birmingham-based responsibility consultancy responsibility Accountant.
“responsibility can get a bit trickier when you’re not based packed-period in the UK,” he says. “Perhaps you’re living abroad, an expat, returning to the UK or a non-resident landlord. Your residency position, the amount of period you spend in a country, is what determines your responsibility obligations.
“It’s really significant to recall to include all foreign returns in your gain and explain your residency position to HMRC. This way, you can keep on top of what UK responsibility you owe, as well as any overseas liabilities.”
Make sure you really have filed your gain, says Helen Thornley, a technical officer at the Association of Taxation Technicians.
“If you are filing yourself online using HMRC’s filing structure, make sure you have not just completed but also submitted your gain.
“Every year, some people get to the complete of their responsibility gain and ponder they have completed it when they haven’t. As part of the final submission procedure, it is essential to enter your login credentials again – so make sure you keep going through HMRC’s online filing structure until you are presented with your submission reference, and the completion box at the top of the screen says 100%.”
Don’t overlook to pay the responsibility you owe, says Charlene youthful, a pensions and funds specialist at the resource platform AJ Bell.
“Make sure you’ve paid what you owe by midnight on 31 January,” she says. “If you don’t, you’ll commence to accrue daily gain from 1 February. The annual gain rate charged by HMRC is a whopping 7.25%.”
youthful adds: “If you’re having hardship paying, you might be able to consent a settlement schedule online with HMRC as long as you owe £30,000 or less. You can also apply to reduce your payments on account for the next year if you ponder your returns will be significantly lower than before.”
