With the self-assessment deadline fast approaching, millions of taxpayers in the UK are racing against time to file their returns for the 2023-24 tax year. HM Revenue & Customs (HMRC) reports that 5.4 million people have yet to submit their returns, sparking concern over potential fines for late submissions. Experts have shared practical tips to help taxpayers avoid pitfalls and maximise eligible claims.
Understand If Self-Assessment Applies to You
Alice Haine, a personal finance analyst at Bestinvest, warns against assuming that tax returns don’t apply to everyone. While many taxpayers have their tax automatically deducted from pay, pensions, or savings, others must file a return.
“For those where the tax is not automatically deducted, or they earn extra untaxed income, filing a tax return is mandatory,” Haine explains. Additional scenarios requiring a return include earning over £150,000, being self-employed, or receiving income from savings, dividends, or rental properties.
Start Filing Without Delay
Jashoda Pindoria, HMRC’s head of self-assessment operations, advises against procrastination. “Starting now means they take the pressure off themselves and can gather all their information and access any help and guidance they need on Gov.uk to ensure their tax return is accurate and submitted on time,” she says.
Use HMRC’s Digital Tools
Caroline Miskin, senior technical manager at the Institute of Chartered Accountants in England and Wales, suggests using HMRC’s app for a seamless experience. The app provides access to crucial information such as self-assessment tax reference numbers and employment income details.
Monitor Savings and Taxable Income
Emma Sterland from Evelyn Partners highlights the importance of checking whether interest earned on savings breaches the personal savings allowance. “As savings rates climbed, more people will now be in the position where they have to declare income from savings via self-assessment,” she says.
Check Pension Contributions and Tax Relief
Sarah Coles, head of personal finance at Hargreaves Lansdown, notes that pensions are a common area for mistakes. She emphasises the need for higher-rate taxpayers with personal pensions to claim additional relief via their tax return.
Declare Cryptocurrency Gains
With 12% of UK adults owning cryptocurrency, Elsa Littlewood, a tax partner at BDO, reminds taxpayers that crypto gains are subject to capital gains tax. “Crypto investments are treated in the same way as traditional investments such as shares when it comes to CGT,” she explains.
Claim Relief on Charitable Donations
Tim Stovold of Moore Kingston Smith advises higher-rate taxpayers to claim tax relief on gift aid donations. “For every £100 donation, a 40% taxpayer can reclaim £25,” he says.
Avoid Child Benefit Tax Penalties
Fiona Fernie of Blick Rothenberg highlights the high-income child benefit charge, which affects individuals earning over £50,000. Including pension contributions and gift aid donations in the tax return can help reduce adjusted net income and lower the penalty.
File and Pay on Time
Helen Thornley of the Association of Taxation Technicians cautions filers to ensure their return is fully submitted, not just completed. Charlene Young of AJ Bell adds, “Make sure you’ve paid what you owe by midnight on 31 January. If you don’t, you’ll start to accrue daily interest.”
With these expert tips, taxpayers can navigate the self-assessment process smoothly, avoid penalties, and make the most of allowable claims.
