Number of people who file their own tax returns because of Christmas balloons increased by 55%
More than 40,000 people completed their tax returns between Christmas Eve and Boxing Day, according to data from HM Revenue & Customs.
Last year, 25,769 people filed their returns in the same three-day period, HMRC said, marking a 55 per cent increase over this festive period.
More than 4,400 self-assessed taxpayers filed their tax returns online on Christmas Day, which represents a slight decrease on last year’s figure (4,757).
Between 3pm and 4pm appeared to be the most popular time to file tax returns online on Christmas Day, with 368 filing their returns between these times.
According to HMRC, 11,932 people filed their tax returns on Boxing Day, with the most popular time being from 4pm to 5pm, and 1,108 people filed their tax returns during this time frame.
More than 23,700 people applied on Christmas Eve instead of shopping and packing at the last minute. The most popular time was from 11am to 12pm, when 3,458 people filed their tax returns, HMRC said.
Self-assessment: You must pay the tax due no later than midnight on January 31, 2025
More attention has been paid to personal finances this year, with the autumn budget playing heavily on the minds of Britons.
Self-assessed taxpayers have until January 31, 2025 to file their online return and pay the tax they owe to HMRC. For paper returns, the deadline was October 31, 2024.
Anyone who files their tax return before December 30 has the option to pay the tax owed through their PAYE tax code.
Myrtle Lloyd, HMRC’s director general of customer service, said: ‘People who need to submit a self-assessment form and have already done so can enjoy the rest of the festive period, knowing they have another year behind them, and can enjoy singing Auld Lang Syne knows their tax affairs are in order.
‘For those who haven’t started yet, our online service is available 365 days a year, so there’s still a chance to get it done before 2024 is over. Visit Gov.uk and search for ‘self-assessment’ to access the online help and get started today.”
Five tips to help your tax planning
Together with Charlene Young, AJ Bell’s pensions and savings expert, This is Money outlines five ways to get your tax affairs in order and avoid HMRC fines.
1. Double-check whether you need to file a tax return
Even if you don’t think you have anything to pay, you may still need to file a return for the tax year or risk penalties. These start at a one-off £100, with more to pay if you are more than three months late.
Circumstances that require a tax return include being self-employed and earning more than £1,000, paying capital gains tax on something you sold or transferred for a profit, paying high-income child benefit or being a partner in a business.
You must also file a tax return if you had an income of more than € 150,000 in the past tax year.
Even if none of the above applies to you, you may still have to file a tax return if you received more than € 1,000 return from savings and investments in the tax year.
2. Sort your statements
Your savings and investment providers should have sent you an annual statement or statement after April 5 showing what you earned with them in the tax year, as well as information about the profit or loss on the investments you sold during that time.
You should check for savings and investment income, namely interest and dividends, as well as any gains you’ve made on the sale of investments outside Isas or private pensions.
You pay tax on the interest you earn on your cash savings that exceeds the personal savings allowance, which currently stands at £1,000 for basic rate taxpayers and £500 for higher rate taxpayers.
Taxpayers with an additional rate do not receive an exemption and pay tax on any cash interest they receive outside a tax shelter.
HMRC will check what you declared on your tax return against the information sent to them by your bank or building society, and any taxes that have already been collected that year through a tax code change.
The tax-free amount for dividend income fell again in 2023/24 to just £1,000 for the tax year. In previous years it was as much as £5,000 a year, but cuts to the benefit mean that millions more people will now be hit with net dividend tax.
You pay tax on dividends above the deduction of 8.75 percent, 33.75 percent or 39.35 percent, depending on your other income.
For the current tax year, from April 6, 2024 to April 5, 2025, the dividend tax threshold is only €500.
For capital gains returns, although changes to CGT were announced in this year’s Budget, the gains you made when you sold or transferred investments in the last tax year will still be taxed at the previous lower rates of 10 per cent or 20 per cent. percent, depending on your other income for that year.
3. Claim pension tax relief
Anyone who paid into a personal pension with their own investment between April 6, 2023 and April 5, 2024 would have automatically received a basic rate reduction of 20 percent.
This adds an automatic top-up to pension contributions, meaning that, for example, a personal contribution of £2,000 will automatically increase by £500 to £2,500.
However, higher rate taxpayers should claim the additional £500 tax relief due from HMRC.
A taxpayer on an additional rate would be able to claim a 25 percent tax credit from HMRC on top of the 20 percent tax credit they automatically receive.
Ms Young of AJ Bell said: ‘Many people don’t realize they need to claim tax relief for their pension, especially as this is only necessary in some types of pension schemes and not in others.
‘If you pay into a ‘net pay’ pension scheme, your contributions are deducted from your pre-tax salary, meaning the income tax credit is usually paid automatically.’
4. Beware of the child support trap
The thresholds for claiming back child benefit are now higher, but taxpayers with children should be aware of the old rates in 2023/2024.
The child benefit for 2023/2024 will be gradually phased out as soon as you or your partner have earned more than €50,000. The benefit expires completely once you reach £60,000.
If you have to repay all or part of your child benefit for that year and your tax code has not yet been amended for this, you must repay this via self-assessment.
HMRC will catch up with those who fail to do so, and as a result they could face an additional penalty.
5. Don’t forget to pay the tax yourself
Regardless of when you file your tax return, make sure you pay the amount due by midnight on January 31, 2025.
If you do not do this, you will accrue interest daily from February 1. The annual interest charged by HMRC is significant, at 7.25 percent.
If you’re having trouble making payments, you may be able to agree a payment plan with HMRC online, as long as you owe £30,000 or less.
In addition to paying the correct amount of tax for self-declaration, advance payments must also be taken into account.
Prepayments are tax payments made twice a year by self-employed taxpayers to spread the cost of taxes for the coming year. They can be substantial.
You can request a reduction in your advance payments for the coming year if you think your income will be significantly lower than before.
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