Are you intimidated by those two little words: Tax Return? You’re not alone. While it may be incredibly daunting at first glance, there is no reason you can’t face the challenge head-on and complete your tax return on time. Once you’ve completed the core section that everyone must fill out, it’s just a matter of addressing the schedules that are relevant to your different income sources during the tax year.
When Is Tax Return Due?
Once you’ve completed the form you will have to calculate your tax liability and find out whether or not you owe anything. This information needs to be submitted and any money you owe paid by January 31st every year. If you’re wondering what tax period this covers, it is April 6th to April 5th of the prior year. If this is confusing, let’s put it in more complete terms: the tax year starts on April 6th of 2022 and runs through April 5th of 2023 (you may see it referred to as the 2022/2023 tax year), so the return for the tax year must be completed and filed by January 31st of 2024 to be in on time.
If, for some reason you’ve gotten ahead of the game and filed your return by October 31st following the conclusion of the tax year, the Revenue calculates the amount of tax you owe prior to the due date of January 31st. What does this mean? In a nutshell, the date would be October 31st, 2023 for the tax that comes payable on the 31st of January, 2024.
How They’ll Nick You For Late Returns and Tax Payments
Should you for some reason fail to file your tax return on time (procrastinators beware!) and miss the January 31st deadline, you’ll be slapped with a £100 fixed penalty. If this isn’t motivation enough and you continue to let it drag out for another three months, you will start incurring daily penalties of £10/day with a maximum of £900. Should, for some reason your assessment is not submitted by the January 31st deadline, interest can and will be charged at the current rate on tax due. Still not compelled? How about throwing some surcharges into the mix, with a 5% surcharge on any tax amount that is unpaid by the 28th of February (too bad they don’t go by the Leap Year calendar!), then if you’re STILL not fully paid up by July 31st, there is an additional 5% surcharge. This is good motivation to file your tax return on time, isn’t it?
Food For Thought: Should you find yourself in a bind and unable to pay your taxes by January 31st, find some way to pay it by that February 28th date to avoid the extra 5% surcharge.
The Art of Estimation (aka Using Estimated Figures Wisely)
It is possible that you don’t have all the information that you need in order to prepare and submit your tax return by 31 January. However, the missing information will be available post 31 January. In this case, it is necessary to figure out a good estimate for this amount.
A return will not be rejected if you use estimated figures. It is very helpful to make use of the “other information” boxes on your return at this point, providing adequate information. If the Revenue feels you’ve been skimpy on these details, it could cause an enquiry to be opened. And really, who wants that? In addition to an enquiry, penalties may be charged if they feel you could have obtained the needed figures before the filing date, but instead decided to go for a beer.
Food For Thought: Should it be the case that you really don’t know your final figures, (be it awaiting more information, replacement of lost paperwork or other issues that keep you from having the necessary numbers), go ahead and file using an estimated figure so you don’t get slapped with penalties. You can then file an amended return when you find the correct figures.