The final stretch: Navigating tax planning for the Income Tax deadline
16/01/2024
The next Income Tax Self-Assessment (ITSA) deadline is just around the corner, so make sure you start the year off on the right foot.
If you are self-employed or an individual taxpayer, you have until 31 January 2024 to get your tax return in order and strategically minimise your tax liabilities, with our team’s help.
Here’s what you need to know to get through ‘the final stretch’:
Do you need to submit a Self-Assessment tax return?
Don’t get caught out by not submitting a tax return if you are required to.
ITSA is an annual process where individuals need to declare their income to HM Revenue & Customs (HMRC) and pay any tax due.
It applies to various income sources including:
- Profits from self-employment
- Sole traders’ income
- Rental income
- Earnings from savings and investments.
If you’re unsure whether you need to submit a tax return, contact our team for advice. We have a broad range of experience with clients in unique circumstances, from having multiple income sources to non-residents.
What are the deadlines?
The 31 January deadline is non-negotiable. It’s the final date for submitting your online tax return and paying any tax you owe.
Missing this deadline results in automatic penalties, starting with a £100 fine.
Keep in mind that there are other deadlines throughout the year, such as the 31 October deadline for paper returns.
How can you plan ahead?
At WMT, we recommend our clients follow some simple steps to achieve an efficient tax return.
- Record-keeping: Accurate and timely record-keeping is foundational in tax planning. Detailed financial records help to identify applicable deductions and reliefs, thereby reducing your tax bill.
- Expenses and allowances: Familiarise yourself with allowable expenses such as business, travel, and home office costs. Understanding your Personal Allowance, which is the amount of income you don’t have to pay tax on, and other allowances like the Trading Allowance, is also crucial.
- Making use of reliefs and exemptions: Consider reliefs like Marriage Allowance or the benefits of Gift Aid donations. Be aware of how pension contributions can affect your taxable income.
- Paying tax in instalments: If you’re facing a substantial tax bill, consider Time to Pay arrangements to spread your tax payments throughout the year.
- Seeking professional advice: Complex situations may require professional guidance. Don’t hesitate to consult our tax advisers for personalised advice.
Get prepared for MTD for ITSA
Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) forms part of the Government’s strategy to modernise the tax system, making it easier for taxpayers to comply with their obligations.
MTD for ITSA will become mandatory for all individual taxpayers earning £50,000 or more per year from self-employment and/or rental properties as of 6 April 2026. This will then roll out to individuals earning over £30,000 from these sources in April 2027.
Whilst there are some instances where individuals will be exempt, the rules will apply to most taxpayers meeting these criteria. Read our guide for more information.
MTD for ITSA might seem like a future concern, but it isn’t. You must understand the regulations and get the correct systems in place before the deadline.
If you need assistance with your Tax Planning or ITSA submission, our team is here to help.
Don’t leave tax planning until the last minute. Contact us now for tailored advice and support to navigate this crucial period with confidence.
