ANOTHER PERSONAL TAX RETURN SEASON!
Congratulations to our compliance team who successfully filed all our client’s self-assessment tax returns ahead of the 31 January filing deadline. Every year we comment on how each year is getting tougher and tougher and this year was no different. The pressure is firstly caused by the increase in the number of individuals who need to file returns, and then the provison of information being left to the last month.
Figures released by HMRC show that more than double the number of taxpayers failed to file their self-assessment tax return on time this year, despite 11.5m meeting the deadline. 605,849 taxpayers missed the 31 January deadline, compared to the 300,000 last year. 778,068 waited until the last day to complete their return filing, including 32,958 taxpayers who filed between 23:00 and 23:59 on 31 January, while 61,549 filed between 16:00 and 16:59 – the peak hour for filing.
Those who have missed the deadline have incurred an automatic penalty of £100. 31 January is also the tax payment deadline, and anyone with outstanding tax should pay as soon as possible, as HMRC charges interest on late payments at 7.75%. Anyone who is having difficulties paying should telephone HMRC to set up a Time to Pay payment plan. It is important that you speak to HMRC to discuss a time to payment arrangement, otherwise the late payment penalties are:
- 5% of tax unpaid after 30 days;
- 5% of tax unpaid after 6 months;
- 5% of tax unpaid after 12 months.
For many of our clients, this years self-assessment return will be the first interaction they have had with our Onvio Client Centre (“Onvio”). Onvio is a secure communication hub enabling clients and Harbour Key to interact and share information in a secure setting, used by Harbour Key for sharing information, including engagement letters, annual accounts and self-assessment returns, and for clients to transfer confidential personal information. As part of using Onvio and familiarising self with its functability, we would encourage all clients to set up a Client Centre account to get the maximum benefit from the systems, including being able to retrieve documents a later date.
OUR CLIENT CENTRE USERS BLOG - ONVIO
PRE TAX YEAR END PLANNING
As we finish reporting the 2023 tax year, the end of the 2024 tax year approaches. Now is a good time to consider your financial position and check whether you have taken full advantage of the tax reliefs and exemptions that are available, as well as prepare for the new tax year (you have less than two months). We will be contacting our corporate clients with a 31 March year-end to consider any corporate planning, which will also be a good opportunity to catch up.
Please note our planning checklist which is intended to provide a guide to the opportunities that we believe may be worth considering. There are many tax-saving measures available and steps that can be taken to improve your tax position, without significant effort. We have listed some planning points to consider which may help reduce your taxes for this tax year (ending 5 April) or prepare for the next, if implemented now. We do have a Budget on 6 March, and highly likely a change of Government at the end of this year, which will result in a Budget. In respect of planning, this should be completed before 5 April, based on the rules and tax rates which are known.
The impact of taxation is only one element in looking at your financial planning, you should also be considering such issues as your savings, investment performance and succession planning. Always take professional advice when deciding your tax planning or investment strategy using a FCA regulated financial adviser.
Continuing with the election theme, the shadow Chancellor, Rachel Reeves, has stated that a Labour government would not increase the 25% corporation tax if voted in. (This comes after stating the cap on bankers’ bonuses would not be reinstated). The shadow Chancellor committed to full expensing, enabling businesses to claim back 100% of the cost of IT equipment and machinery against tax on their profits, as well as promising the £1m annual investment capital allowance will also be maintained.
LET'S COOK WITH JOSIE
HMRC Latest Campaign
HMRC have announced their latest nudge letter campaign, writing to owner manager shareholders, informing them that they may need to declare dividend income. HMRC suspects that some business owners are taking dividends without declaring their taxable income. HMRC has been investigating company reserves identifying companies that have made a profit but have depleted reserves, alluding to a dividend payment, but the shareholders are not reporting on their personal tax return. The shareholder are being given the option to disclose information on any dividends that have not been declared or inform HMRC if they believe there is nothing more to declare. Should you receive one of these letters, please contact Harbour Key to discuss.
Grants for Forest of Dean Business
Businesses in the Forest of Dean are being invited to apply for Rural Business Grants to develop and grow their business. The aim of the grant is to improve the productivity of rural areas. Applications will close on 3 March 2024, and are open to existing micro-businesses (fewer than 10 employees), small businesses (fewer than 250 employees) and social enterprises. Eligible uses of the grant include, promoting the visitor economy, farm diversification to generate new income streams, improving digital connectivity infrastructure. Grant funding awards will be between £3,000 - £25,000, with 20% match funding required. Further information can be found here.
Payrolling of Employment Benefits
The reporting and payment of income tax and Class 1A NICs on benefits in kind (BIK), for example a company car, will have to be made through payroll software from April 2026. Currently it is voluntary to payroll benefits but will be mandatory as part of HMRC’s plans for a move to a digital first tax authority but the timetable for the rollout is tight with just over two years to develop the software and conduct testing.
DATES FOR YOUR DIARY
- 6 March – Spring Budget.
- Key tax dates for the period 1 January 2024 to 30 April 2024 can be foundHERE!
Should you wish to speak with us about a specific matter, or just to be a sounding board or for a chat, please do not hesitate to give us a call on 01452 713277
