Many Thousands More To File Tax Returns for the First Time
Due to frozen thresholds and rising incomes ...
Posted by Roger Eddowes on 21/12/2023 @ 8:00AM
With the threshold for income tax remaining frozen at £12,500 for the fifth consecutive year, and the higher rate threshold remaining at £50,000, more and more individuals are finding themselves in the self-assessment tax return system ...
Read my tips, and a few warnings, to help you navigate through the complex tax return process!
This means that anyone earning over £12,500 or receiving income from sources other than employment, such as property rental or dividends, must file a tax return. This may come as a surprise to many, but the real concern is the lack of awareness and support from HMRC.
HMRC is hindering early tax return filing by pushing taxpayers to use their online services instead of the helpline. This has resulted in long wait times and poor customer service, making it difficult for individuals to seek guidance on their tax obligations.
As a result, many could end up missing the deadline for filing their tax return, which incurs an automatic penalty of £100. And with HMRC's strict penalties for late or incorrect submissions, innocent taxpayers could face hefty fines for simple mistakes.
So, what should you do if you find yourself in the position of having to file a tax return for the first time? Here are my tips, and a few warnings, to help you navigate through the complex tax return process.
Property Gains - If you have sold a property for a gain, you may be required to pay Capital Gains Tax. Make sure to include all the necessary information, such as the purchase and sale price, and any allowable expenses, to accurately calculate your tax liability.
Trust Tax - If you are a trustee or beneficiary of a trust, you may need to declare any income or gains from the trust on your tax return. Make sure to keep track of all trust income and expenses to ensure you are reporting the correct amount.
Pension Relief - If you have made contributions to a pension scheme, you may be entitled to tax relief. Make sure to include this information on your tax return to potentially reduce your tax bill.
Child Benefit - If you or your partner earns over £50,000 and you receive child benefit, you may be required to pay the High Income Child Benefit Charge. Make sure to include this on your tax return to avoid any penalties for non-disclosure.
Company Share Incentives - If you have received any share incentives from your employer, you may need to report these on your tax return. Make sure to keep track of any share options or awards to accurately report this on your return.
Reclaiming Double Taxes - If you have income from overseas sources, you may be entitled to reclaim any taxes paid in another country. Make sure to include this on your tax return to avoid being taxed on the same income twice.
Thousands more individuals in the UK are now facing the daunting task of filing a tax return for the first time. With complex rules and poor customer service at HMRC, taxpayers need to be aware of their obligations and seek guidance if needed.
Follow my tips and be mindful of potential pitfalls, avoid costly penalties and successfully file your tax return on time.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like help with your first tax return, it may be a great idea to call me on 01908 774320 and let's see how I can help.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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