Completing your tax return
Jan 10 2006
With the clock ticking on the deadline for submitting your tax return this month, Ian Abrey, tax partner at Mazars advisory group provides timely details of extra last minute things you should remember – in addition to submitting the return before 31 January!
As well as lodging your tax return by 31 January, this is also the due date to pay tax. Interest is charged on late payment at 6.5 per cent per annum. More importantly, if the tax is not paid by 28 February there is a 5 per cent surcharge. Your payment may include a sum accounting for your 2006 liability. If your income is dependent on fluctuating business profits, and 2005 was a bumper year, you may want to consider electing to reduce your payments on account to a level more in line with your expected profits for this year. This has obvious cash flow advantages, but do beware! If you underestimate the amount due, you will be faced with an interest charge.
Also, 31 January 2006 is the last day on which you can pay a personal pension contribution and relate it back to the 2005 tax year. From 6 April, such carry-back is abolished, although there will be much more generous contribution limits from that date.
If you are going to submit your tax return close to the deadline, filing it in on the internet does ensure timely delivery – as long as the HM Revenue & Customs website can cope better than last year with the volume submitted! But using the internet method is not suitable for all taxpayers, particularly those with overseas income or complex capital gains. In those instances, it may be worth employing an accountant to help you in the next few weeks before the deadline.
To find out the most common tax return mistakes, click here.
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