Self Assessment Tax Return
Personal tax can be complex and baffling which leads to lots of people paying too much tax.
As well as paying too much tax you can incur fines and interest if submission dates are missed. After each tax year, paper returns are due on 30 September and online returns are due on 31 January.
For example; for the tax year ending 5th April 2017, paper returns are due on 30 September 2017 and online returns are due 31 January 2018. OJ Williams Accounting Limited can make certain you don’t pay too much tax and ensure your returns are always on time.
There are many things you can do to reduce your tax liability using the tax reliefs that are available.
Remember tax avoidance is perfectly legal, tax evasion and breaking the rules are illegal.
We can help you with your self assessment tax return from £100. View our current prices
There are many things to consider to ensure you pay the right amount of tax:
Salary v Dividends
If you own a company you have the choice to pay yourself a salary or dividends. There are pros and cons of each method but a combination of both are usually the most tax advantageous as dividends are not subject to national insurance and the income tax on them is lower. At the same time there are corporation tax considerations on paying yourself dividends not a salary; we can discuss this with you and calculate the most tax efficient way for your personal situation.
To encourage people to pay into pensions the government offesr tax relief on pension payments. As you pay Income Tax on your earnings before any pension contribution, your pension provider claims tax back from the government at the basic rate of 20 per cent. In practice, this means that for every £80 you pay into your pension, the government will contribute £20 directly and you end up with £100 in your pension.
|Pay 20% tax||£20|
So to pay £80 in your pension you would have had to earn £100. To encourage people to pay into a pension the government will give you the £20 back directly to your pension fund.
If you pay tax at the higher rate of 40%, to receive net pay of £80 to pay into your pension you would have to earn £133. The government will automatically pay 20% to your pension provider but you are entitled to the additional tax back in your tax return. If you don’t declare these pension contributions in your tax return you will miss out on this tax refund. We will ensure that you do not miss out on this.
|Pay 40% tax||£53|
In this example the government will automatically pay £20 directly to your pension on your £80 contribution but you can reclaim the additional £33 back through your tax return. We will make sure you don’t miss out.
You may have heard of gift aid, this works in a similar way to the pension contributions above. The government offers tax relief on charity payments. As you pay Income tax on your earnings before any charity donation, the charity can claim tax back from the government at the basic rate of 20 per cent. In practice this means that for every £80 you donate to a charity, the charity gets £100 in total. This is gift aid.
If you pay tax at a higher rate, you can receive the additional tax back in your tax return. If you don’t declare these charity contributions in your tax return you will miss out on this tax refund. We will ensure that you do not miss out on this.
Professional body membership
If you have to be a member of a professional body to carry out your work, you may be entitled to tax relief on you annual membership fee. We can advise you on this.
If your husband or wife does a lot of work for your company but you do not pay them a salary you may be missing out on their tax allowances. If only one person earns the income they might pay 40% or 45% on most of the income, however, if you pay some to your partner they may pay a lower rate of tax depending on the amount they earn. You must not pay your partner more than a market rate for a similar role, i.e. what you would pay an external person to do the work, as you must be able to prove that tax avoidance was "not the main or one of the main purposes" of the arrangement. And, simply put, if your partner doesn’t do anything for your business income shifting is illegal.
We can discuss your situation to ensure you are not paying too much tax but also not breaking the rules.
If you have a partner who isn’t working or has a child we can review your situation to ensure that you are claiming all the relevant tax credits available to your family. The rules changed in 2015, if anyone in your household has taxable income of over £50k and child benefits are being claimed you must inform HMRC.
We can make sure you avoid fines by fulfilling your reporting obligations to the HMRC and you get what you are entitled to.