When the end of a tax year passes, the 5 April 2024 for the current year, or the end of an accounting year if a company, any opportunity to take advantage of tax planning strategies closes.

For example, if the purchase of plant or other qualifying equipment is made the day before the cut-off date, tax relief will be secured a year earlier than if the payment was made a month later.

For individuals and the self-employed there is still an opportunity to review personal tax issues before the tax year ends 5 April 2024.

Every person tends to have different circumstances and so it is important to review those circumstances on a case by case basis rather than adopt a more generic approach.

Currently, there are cases where 2022-23 self-assessment tax returns have still not been filed. And if you are in that grouping, and we act for you, could you please let us have your records as soon as possible. But when the deadline passes, 31 January 2024, we will have two months to take a look at tax planning options for 2023-24 and take appropriate action if there are opportunities to reduce your tax footprint for 2023-24.

There is nothing worse than looking back, after the tax year end or company accounting period end and reflecting that if certain actions had been taken before those cut-off dates, savings or cashflow could have been protected.

So please, if your business or personal tax affairs warrant a review, can you call to organise a meeting – or set up an online meeting – such that we can brainstorm your options before these planning deadlines close.

If you earn over £100,000 in any tax year your personal allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. This means that any taxable receipt that takes your income over £100,000 will result in a reduction in personal tax allowances and can result in your personal Income Tax allowance being reduced to zero if your adjusted net income is £125,140 or above.

Your adjusted net income is your total taxable income before any personal allowances, less certain tax reliefs such as trading losses, certain charitable donations and pension contributions.

For the current tax year if your adjusted net income is likely to fall between £100,000 and £125,140 you would pay an effective marginal rate of tax of 60% on your income above £100,000 as your £12,570 tax-free personal allowance is gradually withdrawn.

If your income sits within this band, you should consider what financial planning opportunities are available to avoid this personal allowance trap by reducing your income below the £100,000 threshold. This can include gifts to charity, increasing pension contributions and participating in certain investment schemes.

A higher rate or additional rate taxpayer who wanted to reduce their tax bill could make a gift to charity in the current tax year and elect to carry back the contribution to 2022-23. A request to carry back the donation must be made before or at the same time as the 2022-23 Self-Assessment return is completed i.e., by 31 January 2024.

Fraudsters are continuing to target taxpayers with scam emails in advance of the deadline for the submission of Self-Assessment returns for the 2022-23 tax year. In the 12 months to September 2023, HMRC received more than 130,000 reports of suspicious contact of which almost 58,000 related to bogus tax rebate referrals. 

A number of these scams purport to tell taxpayers they are due a rebate / refund of tax from HMRC and ask for bank or credit card details in order to send the fake tax refund. The fraudsters use various means to try and scam people including making contact by phone calls, texts or emails. Fraudsters have been known to threaten victims with arrest or imprisonment if a bogus tax bill is not paid immediately.

HMRC operates a dedicated Customer Protection team to identify and close down these scams but continues to advise taxpayers to identify fraud and avoid becoming victims themselves. For example, HMRC only make contact with taxpayers due a refund by post and never use emails, text messages or external companies for this activity. Genuine organisations like HMRC and banks will never contact customers asking for their PIN, password or bank details.

If you think you have received a suspicious email claiming to be from HMRC you are asked to forward the details to phishing@hmrc.gov.uk, Suspicious texts to 60599 and calls can be reported on GOV.UK. If you have suffered an actual financial loss, you should contact Action Fraud on 0300 123 2040 or use their online fraud reporting tool.

HMRC’s Director General for Customer Services, said:  

'HMRC is reminding customers to be wary of approaches by fraudsters in the run up to the Self-Assessment deadline. Criminals are great pretenders who try and dupe people by sending emails, phone calls and texts which mimic government messages to make them appear authentic.'

There are now less than 100 days to file your 2022-23 Self-Assessment tax return online. The deadline is 31 January 2024. The deadline for paper returns ended on 31 October 2023.

You should also be aware that payment of any tax due should also be made by this date, 31 January 2024. This includes the payment of any balance of Self-Assessment liability for the 2022-23 plus the first payment on account due for the current 2023-24 tax year.

If you miss the filing deadline you will usually be charged a £100 fixed penalty. If your return is up to 3 months late, regardless of whether you owed tax or not, and if you do not file and pay before 1 May 2024, then you will face further penalties unless you have arranged to pay with HMRC.

HMRC is encouraging taxpayers to complete their tax return as early as possible to avoid getting more stressed as the filing date looms. Those who submit their returns early still have until 31 January 2024 to pay any tax due.

If you are filing online for the first time you should ensure you register to use HMRC’s Self-Assessment online service as soon as possible. Once registered an activation code will be sent by mail. This process can take up to 10 working days. 

Dividends received are taxed as income but the rates of tax applied are different to the formal Income Tax rates. Also, individuals can receive dividends up to the annual dividend allowance tax free. The annual dividend allowance for 2023-24 is £1,000.

The current tax rates for dividends received (in excess of the dividend tax allowance) are as follows:

• 8.75% if dividends form part of a taxpayer's basic rate band;
• 33.75% if dividends form part of a taxpayer's higher rate band; or
• 39.35% if dividends form part of a taxpayer's additional rate band.

Dividends that fall within (are covered by) your Personal Allowance do not count towards your dividend allowance. It is also possible that you may pay tax at more than one rate of tax.

If you receive up to £10,000 in dividends, you can ask HMRC to change your tax code and the tax due will be taken from your wages or pension. Alternatively, you can enter the dividends on your Self-Assessment tax return if you already file a return.

You do not need to notify HMRC if the dividends you receive are within your dividend allowance for the tax year.

If you have received over £10,000 in dividends, you will need to complete a Self-Assessment tax return. If you do not usually complete a tax return, you will need to register by 5 October following the tax year in which you had the relevant dividend income.

The 2022-23 tax return filing deadline for taxpayers who continue to submit paper Self-Assessment returns is 31 October 2023. Late submission of a Self-Assessment return will incur a £100 late filing penalty. The penalty usually applies even if there is no liability or if any tax due is paid in full by 31 January 2024.

We would recommend that anyone still submitting paper tax returns consider the benefits of submitting the returns electronically, and therefore benefit from an additional three months (until 31 January 2024) in which to submit a return.

Taxpayers with certain underpayments in the 2022-23 tax year can elect to have this amount collected via their tax code (in 2024-25) provided they are in employment or in receipt of a UK-based pension. The coding applies to certain debts and the amount of debt that can be coded out ranges from £3,000 to £17,000 based on a graduated scale. The maximum coding out allowance only applies to taxpayers with earnings exceeding £90,000.

Daily penalties of £10 per day will also take effect if the tax return is still outstanding three months after the filing date up to a maximum of £900. If the return still remains outstanding further higher penalties will be charged when a return is six months and twelve months late.

Taxpayers that received a letter informing them that they have to submit a paper return after 30 July 2023 have an extended deadline which runs for three months from the date they received the letter to submit a paper return.

There is an interesting anomaly that can affect taxpayers with homes in Scotland and other parts of the UK. Where this is the case, the question arises as to whether or not the taxpayer is liable to pay Income Tax in Scotland or elsewhere.

As a general rule, the Scottish rate of Income Tax (SRIT) is payable on the non-savings and non-dividend income of those defined as Scottish taxpayers. The definition of a Scottish taxpayer generally focusses on the question of whether the taxpayer has a 'close connection' with Scotland or elsewhere in the UK. The liability to SRIT is not based on nationalist identity, location of work or the source of a person’s income, e.g., receiving a salary from a Scottish business.

Where a taxpayer has a home in Scotland and also elsewhere in the UK, they need to ascertain which is their main home based on published guidance and the facts of the case.

HMRC’s guidance on the issue states the following:

Your main home is usually where you live and spend most of your time. It does not matter whether you own it, rent it or live in it for free. Your main home may be the home where you spend less time if that’s where:

• most of your possessions are;
• your family lives if you are married or in a civil partnership;
• you are registered for matters such as your bank account, GP or car insurance; or
• you are a member of clubs or societies.

It is also possible to change which home counts as your main home if there has been a material change in the underlying facts. Scottish taxpayer status applies for a whole tax year. It is not possible to be a Scottish taxpayer for part of a tax year.

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. If you are using this scheme, you should ensure that rents received from lodgers during the current tax year do not exceed £7,500. The tax exemption is automatic if you earn less than £7,500 ;there are no specific tax reporting requirements. If required, homeowners can opt out of the scheme and record property income and expenses as usual.

You can use the scheme if:

• you let a furnished room to a lodger; or
• your letting activity amounts to a trade, for example, if you run a guest house or bed and breakfast business, or provide services, such as meals and cleaning.

You cannot use the scheme if the accommodation is:

• not part of your main home when you let it;
• not furnished;
• used as an office or for any business — you can use the scheme if your lodger works in your home in the evening or at weekends or is a student who is provided with study facilities; or
• in your UK home and is let while you live abroad.

The relief also simplifies the tax and administrative burden for those with rent-a-room income up to £7,500. The limit is reduced by half if the income from letting accommodation in the same property is shared by a joint owner of the property.

The rent-a-room limit includes any amounts received for meals, goods and services provided, such as cleaning or laundry. If gross receipts are more than the limit taxpayers can choose between paying tax on the actual profit (gross rents minus actual expenses and capital allowances) or the gross receipts (and any balancing charges) minus the allowance – with no deduction for expenses or capital allowances.

The basis of assessment reforms will change the way trading income is allocated to tax years. The changes will affect sole traders and partnerships that use an accounting date between 6 April and 30 March. There is no change to the rule for companies.

The reforms will change the basis period from a ‘current year basis’ to a ‘tax year basis’.

Under the current rules there can be overlapping basis periods. When this occurs, tax may be charged on profits twice and generate ‘overlap relief’. This overlap relief can be used on the cessation of a business or when an accounting date is changed. The new method of using a ‘tax year basis’ will remove the basis period rules and prevents the creation of further overlap relief. 

The new rules will come into effect in the 2024-25 tax year and the current 2023-24 tax year is known as the ‘transition year’. During the transitional year, all businesses’ basis periods will be aligned to the tax year and all outstanding overlap relief can be used against profits for that tax year.

Affected businesses in 2023-24 will be assessed on the tax for profits for the:

• 12 month accounting period they have previously been using; and
• for the rest of the 2023-24 tax year.

Any excess profit covering more than 12 months, is known as ‘transition profit’. This can be reduced by overlap relief and the remaining profit will be spread over the next 5 tax years until 2027-28.

The changes do not affect sole traders and partnerships who draw up annual accounts to a date between 31 March and 5 April. These businesses will continue to file as usual for the 2023-24 accounting year. 

Taxpayers that need to complete a Self-Assessment return for the first time are required to notify HMRC. This is a final reminder that the latest date that HMRC should be notified, by new Self-Assessment taxpayers, for the 2022-23 tax year, is 5 October 2023. The deadline for filing the 2022-23 Self-Assessment tax return online and paying any tax due is 31 January 2024.

There are a number of reasons why you might need to complete a Self-Assessment return for the first time. This includes if you are self-employed, have an annual income over £100,000 and / or have income from savings, investment or property.

The £100,000 income threshold for Self-Assessment changed for taxpayers who are only taxed through PAYE. It increased from £100,000 to £150,000 with effect from 6 April 2023. However, the Self-Assessment threshold for 2022-23 returns remains at £100,000.  

HMRC has an online tool www.gov.uk/check-if-you-need-tax-return/ that can help you check if you are required to submit a Self-Assessment return.

The following list summarises some of the reasons when taxpayers are usually required to submit a Self-Assessment return:

• The newly self-employed (earning more than £1,000);
• Multiple sources of income;
• Taxpayers that have received any untaxed income, for example earning money for creating online content;
• Income over £100,000;
• earn income from property that they own and rent out;
• are a new partner in a business partnership;
• Taxpayers whose income (or that of their partner’s) was over £50,000 and one of you claimed Child Benefit;
• Receiving interest on savings or investment income of £10,000 or more before tax;
• Taxpayers who made profits from selling things like shares, a second home or other chargeable assets and need to pay Capital Gains Tax; and
• Taxpayers who are self-employed and earn less than £1,000 but wish to pay Class 2 NICs voluntarily to protect their entitlement to State Pension and certain benefits.

The Scottish rate of income (SRIT) is payable on the non-savings and non-dividend income of those defined as Scottish taxpayers. This means that Scottish taxpayers who also have savings and dividend income need to consider the UK rates as well as the Scottish rates when calculating their Income Tax bill.

Scottish taxpayer status applies for a whole tax year. It is not possible to be a Scottish taxpayer for part of a tax year. The definition of a Scottish taxpayer is generally focused on the question of whether the taxpayer has a 'close connection' with Scotland or elsewhere in the UK. The idea of being treated as a Scottish taxpayer is not based on nationalist identity, location of work or the source of a person’s income, e.g., receiving a salary from a Scottish business.

For the vast majority of individuals, the question of whether or not they are defined as a Scottish taxpayer is a simple one – they either live in Scotland and are a Scottish taxpayer or live elsewhere in the UK and are not a Scottish taxpayer.

More specifically, an individual will generally be defined as a Scottish taxpayer if they satisfy any of the following tests:

1. They are a Scottish Parliamentarian.
2. They have a 'close connection' to Scotland, through either:
   i) having only a single 'place of residence', which is in Scotland; or
   ii) where they have more than one 'place of residence', having their 'main place of residence' in Scotland for at least as much of the tax year as it has been in any one other part of the UK.
3. Where no 'close connection' to Scotland (or any other part of the UK) exists (either through it not being possible to identify any place of residence or a main residence) – then place of residence will be decided by day counting.

In most cases these tests will help identify a taxpayer's status. However, there is further technical guidance available where the answer is not clear.

The £100,000 threshold for Self-Assessment change for taxpayers taxed through PAYE only, increased from £100,000 to £150,000 with effect from 6 April 2023. However, the Self-Assessment for 2022-23 tax returns remains at £100,000.  

Taxpayers who submit a Self-Assessment tax return for 2022-23 showing income between £100,000 and £150,000 taxed through PAYE and do not meet any of the other criteria for submitting a Self-Assessment return will be sent an exit letter by HMRC. This will remove the requirement for an annual Self-Assessment tax return to be submitted by qualifying taxpayers.

For the 2023-24 tax year onward, taxpayers will still need to submit a Self-Assessment tax return if their income taxed through PAYE is below £150,000 but they meet one of the other criteria for submitting a Self-Assessment return, for example:

• receipt of any untaxed income;
• partner in a business partnership;
• liability to the High Income Child Benefit Charge; or
• self-employed individual and with gross income of over £1,000.

Taxpayers that need to complete a Self-Assessment return for the first time should inform HMRC as soon as possible. The latest date that HMRC should be notified is by 5 October following the end of the tax year for which a Self-Assessment return needs to be filed. If you are required to submit a Self-Assessment return for 2022-23, you should ensure that you file your tax return electronically and pay any tax due by 31 January 2024.

HMRC has an online tool available at www.gov.uk/check-if-you-need-tax-return/ that can help taxpayers decide if they are required to submit a Self-Assessment return.

The gift aid scheme, which was originally introduced in 1990, allows charities to reclaim from HMRC the basic rate of Income Tax deducted from qualifying donations by UK taxpayers. This means that where a basic rate taxpayer claims gift aid on a £100 donation, the charity can reclaim from HMRC the £25 of tax paid on that donation.

If you are a higher rate or additional rate Income Tax payer you can also claim additional tax relief on the difference between the basic rate and your highest rate of tax.

For example:

If you donated £5,000 to charity, the total value of the donation to the charity is £6,250. You can claim back additional tax back of:

• £1,250 if you pay tax at the higher rate of 40% (£6,250 × 20%),
• £1,562.50 if you pay tax at the additional rate of 45% (£6,250 × 25%).

Taxpayers also have the option to carry back their charitable donations to the previous tax year. A request to carry back the donation must be made before or at the same time as your previous year’s Self-Assessment return is completed.

This means that if you made a gift to charity in the current 2023-24 tax year that ends on 5 April 2024, you can accelerate repayment of any tax associated with your charitable giving by carrying back the donation to the previous tax year, 2022-23. This can be a useful strategy to maximise tax relief if you will not be paying higher rate tax in the current tax year but did so in the previous tax year. This should be done as part of the Self-Assessment tax return for 2022-23 which must be submitted by 31 January 2024.

You can only claim if your donations qualify for gift aid. This means that your donations from both tax years together must not be more than 4 times what you paid in tax in the previous year.

Self-assessment taxpayers are usually required to pay their income tax liabilities in three instalments each year. The first two payments are due on:

• 31 January during the tax year e.g., for 2022-23 the first payment on account was due on 31 January 2023.
• 31 July following the tax year e.g., for 2022-23 the second payment on account was due on 31 July 2023.

These payments on account are based on 50% of the previous year’s net income tax liability. In addition, the third (or only) payment of tax will be due on 31 January following the end of the tax year.

There is no requirement to make payments on account where your net Income Tax liability for the previous tax year is less than £1,000 or if more than 80% of that year’s tax liability has been collected at source.

The payments are based on 50% of your previous year’s net income tax liability. If you think that your income for the next tax year will be lower than the previous tax year, you can apply to have your payment on account reduced. This can be done using HMRC’s online service or by completing form SA303.

HMRC’s internal manuals are clear that a reason for requesting a reduction in the payments on account must be given. A request without a reason is not a valid claim.

There are no restrictions on the number of claims to adjust payments on account a taxpayer or agent can make. However, there is a time limit which means that the claim must be received before the 31 January following the tax year in question, for example by 31 January 2024 for the year 2022-23.

There is no requirement to notify HMRC if your taxable profits have increased year on year.

Simple Assessment is a method by which HMRC can assess where additional Income Tax is due by a taxpayer. A Simple Assessment letter is usually issued to taxpayers with reasonable straight forward tax affairs. The Simple Assessment notice of liability does not require taxpayers to submit a Self-Assessment tax return.

The Simple Assessment process was first announced by HMRC back in 2016. However, the rollout has been paused a number of times. The process can be used in various situations, for example, where it is not possible to collect the whole of a person’s annual Income Tax liability through PAYE, if HMRC is owed £3,000 or more and if there is tax to be paid on the State Pension.

Recipients of a Simple Assessment tax bill should check that the amounts shown in the letter match your records, for example, your P60, bank statements or letters from the Department for Work and Pensions (DWP).

If the amounts are correct, you will need to pay your Simple Assessment tax bill. 

You must pay by either:

• 31 January – for any tax you owe from the previous tax year; or
• within 3 months of the issue date if you received your letter after 31 October.

The tax year runs from 6 April to 5 April. In some cases, HMRC will allow the payments to be made in instalments.

A taxpayer who does not agree with the Simple Assessment has 60 days from the date it was issued to contact HMRC, setting out the reasons for their objections. If no objections are raised within 60 days, the Simple Assessment is automatically finalised.

There are a number of reasons why you might need to complete a Self-Assessment return for the first time. This includes if you are self-employed, have an annual income over £100,000 and / or have income from savings, investment or property.

Taxpayers that need to complete a Self-Assessment return for the first time (for the 2022-23 tax year) should inform HMRC as soon as possible. The latest date that HMRC should be notified is by 5 October 2023.

HMRC has an online tool www.gov.uk/check-if-you-need-tax-return/ that can help you check if you are required to submit a Self-Assessment return.

The following list summarises some of the reasons when taxpayers are usually required to submit a Self-Assessment return:

• newly self-employed (earning more than £1,000);
• individuals with multiple sources of income;
• taxpayers that have received any untaxed income, for example earning money for creating online content;
• individuals with income over £100,000, and note, that from tax year 2023-24 the Self-Assessment threshold for individuals taxed through PAYE only, will change from £100,000 to £150,000;  
• those who earn income from property that they own and rent out;
• who are a new partner in a business partnership;
• taxpayers whose income (or that of their partner’s) was over £50,000 and one of you claimed Child Benefit;
• those receiving interest on savings or investment income of £10,000 or more before tax;
• taxpayers who made profits from selling things like shares, a second home or other chargeable assets and need to pay Capital Gains Tax; and
• taxpayers who are self-employed and earn less than £1,000 but wish to pay Class 2 NICs voluntarily to protect their entitlement to State Pension and certain benefits.

The Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities whether due to misunderstanding of the tax rules or due to deliberate tax evasion. Participation in the campaign is open to all residential property landlords with undisclosed taxes. The campaign is not suitable for those letting out non-residential properties.

Landlords who do not avail of the opportunity and are targeted by HMRC can face penalties of up to 100% of the tax due together with possible criminal prosecution. Taxpayers that come forward will benefit from better terms and lower penalties. Landlords that make an accurate voluntary disclosure are likely to face a maximum penalty of 0%, 10% or 20% depending on the circumstances of their disclosure. The penalties would be in addition to the tax and interest due. There are higher penalties for offshore liabilities. 

There are three main stages to taking part in The Let Property Campaign:

1. notifying HMRC that you wish to take part;
2. preparing an actual disclosure; and
3. making a formal offer together with payment.

The campaign is open to all individual landlords renting out residential property. This includes landlords with multiple properties and specialist landlords with student or workforce rentals. Once HMRC have been notified of the wish to take part in the campaign, landlords usually have 90 days to calculate and pay any tax owed.

If you are an employee that needs to buy substantial equipment to use as part of your employment you may be able to claim tax relief. In most cases you can claim tax relief on the full cost of this type of equipment. Tax relief is reduced if your employer provides a financial contribution towards buying the item.

The way to claim tax relief depends on the amount you are claiming. HMRC provides the following information on making a claim:

Claims up to £2,500

You can make your claim:

• Using a Self-Assessment tax return if you already file a return.
• By using HMRC’s online service or by printing and posting form P87 if you do not file a tax return.
• By phone if you have had a successful claim in a previous year and your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions).

Claims over £2,500

• You can only claim using a Self-Assessment tax return. You need to register if you do not file a return.

There are different rules if you are an employee using your own uniforms, work clothing and tools for work. You cannot claim relief on the initial cost of buying small tools or clothing for work. However, it is possible to claim for the cost of repairing or replacing small tools you need to provide as an employee (for example, scissors or an electric drill), or cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots). A claim for valid purchases can be made against receipts or as a 'flat rate deduction'. 

You have four years from the end of the tax year to make a claim. For example, there is a deadline of 5 April 2024 for making a claim dating back to the 2019-20 tax year. 

There is an online tool that allows taxpayers to check if they need to notify HMRC about additional income. The online tool can be found at www.gov.uk/check-additional-income-tax.

This could include earnings from:

• selling goods, for example at car boot sales or auctions, or online;
• Undertaking casual jobs such as gardening, food delivery or babysitting;
• charging other people for using your equipment or tools; and
• renting out property or part of your home, including for holidays (for example, through an agency or online).

In most cases, these types of income are taxable. However, there are two separate annual £1,000 tax allowances for property and trading income. If you have both types of income highlighted below, then you can claim a £1,000 allowance for each. The online tool will indicate if this is relevant.

The £1,000 exemptions from tax apply to:

• If you make up to £1,000 from self-employment, casual services (such as babysitting or gardening) or hiring personal equipment (such as power tools). This is known as the trading allowance.
• If your annual gross property income is £1,000 or less, from one or more property businesses you will not have to tell HMRC or declare this income on a tax return. For example, from renting a driveway. This is known as the property allowance.

Where each respective allowance covers all the individual’s relevant income (before expenses) the income is tax-free and does not have to be declared. Taxpayers with higher amounts of income will have the choice, when calculating their taxable profits, of deducting the allowance from their receipts, instead of deducting the actual allowable expenses. 

The 2022-23 tax year ended on 5 April 2023 and the new 2023-24 tax year started on 6 April 2023. Many taxpayers will be happy to leave dealing with their 2022-23 tax returns until later this year or even until January 2024.

The 31 January 2024 is not just the final date for submission of the 2022-23 Self-Assessment tax return but also an important date for payment of tax due. This is the final payment deadline for any remaining tax due for the 2022-23 tax year. In addition, the 31 January 2024 is also the due date for the first payment on account for 2023-24.

HMRC’s recent press release recommends early filing of tax returns. In most circumstances, we would agree with this recommendation. By preparing your tax return early in the tax year you have not accelerated the payment date, but you will know what your tax bill will be well before the payment deadline of 31 January 2024. You can also spread the cost of your tax bill using HMRC’s Budget Payment Plan and avoid the eleventh-hour rush.

Remember that calculating how much tax you may owe is a separate process to filing the return, and so you will also need to remember to file your return and pay any tax due by 31 January 2024. This strategy should also give you time to set aside enough money to pay any tax payable. Of course, if you are owed a repayment of tax then it is a useful strategy to file your tax return as soon as possible and thus accelerate the repayment.

The SA302 tax calculation and tax year overview documents are commonly used as evidence of income for loan or mortgage purposes for the self-employed. The forms have become more widely used since the mortgage rules have required evidence of income for the self-employed. The SA302 provides this evidence for the last four years Self-Assessment tax returns.

The SA302 shows the breakdown of the income returned on the taxpayer’s tax return, including commercial versions. The tax year overview confirms the tax due from the return submitted to HMRC and shows any payments made, cross referencing the Tax Calculation with HMRC records.

Self-Assessment taxpayers can use HMRC’s online service to request an SA302 tax calculation. It takes 72 hours after an online tax return has been submitted before the documents are available to print.

Most lenders will accept a SA302 printed from online accounts or from the commercial software used to submit returns. HMRC has been working with the Council of Mortgage Lenders and their members to increase the number of lenders who will accept self-serve copies.

The second payment on account for Self-Assessment taxpayers for the 2022-23 tax year is due on 31 July 2023. Taxpayers are usually required to pay their Income Tax liabilities in three instalments each year. The first payment was due on 31 January 2023. The final balancing payment of tax will be due on 31 January 2024.

If you are having trouble paying your tax on time you may be eligible to receive support with your tax affairs. An online payment plan for Self-Assessment tax bills can be used to set up instalment arrangements for paying tax liabilities up to £30,000.

Taxpayers that want to use the online option must have filed their latest tax return within 60 days of the payment deadline and intend to pay their debt within the following 12 months or less. Taxpayers that qualify for a Time to Pay arrangement using the self-serve Time to Pay facility online, can do so without speaking to an HMRC adviser.

Taxpayers with Self-Assessment tax payments that do not meet the above requirements need to contact HMRC to formally request a Time To Pay arrangement. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

HMRC will only offer taxpayers the option of extra time to pay if they think they genuinely cannot pay in full but will be able to pay in the future. If HMRC do not think that more time will help, they can require immediate payment of a tax bill and start enforcement action if no payment is forthcoming.

There are special rules to follow if you have submitted a Self-Assessment return and subsequently realise you need to change it. For example, this can happen if you made a mistake like entering a number incorrectly or missed information from the return.

If you filed your return online, you could amend your return online as follows:

1. Sign in to your personal tax account using your Government Gateway user ID and password.
2. From ‘Your tax account’, choose ’Self-Assessment account’ (if you do not see this, skip this step).
3. Choose ‘More Self-Assessment details’.
4. Choose ‘At a glance’ from the left-hand menu.
5. Choose ‘Tax Return options’.
6. Choose the tax year for the year you want to amend.
7. Go into the tax return, make the corrections and file it again.

You must wait three days (72 hours) after filing before updating your return. If you opted to file your return on paper, you will need to download a new return and fill in the pages that you wish to change and write ‘amendment’ on each page. You must also include your name and Unique Taxpayer Reference on each page and then send the corrected pages to the address where you sent your original return.

If you used commercial software to submit your Self-Assessment return, then you should contact your software provider in the first instance. If your software provide cannot help, then you should contact HMRC.

The deadline for making changes for the 2021-22 tax year using any of the methods outlined above is 31 January 2024. If you have missed the deadline, you will need to write to HMRC instead. For example, if you found a mistake in your 2020-21 return after 31 January 2023. In the letter, you will need to say which tax year you are correcting, why you think you have paid too much or too little tax and by how much. You can claim a refund up to four years after the end of the tax year it relates to.

The Gift Aid scheme is available to all UK taxpayers. The charity or Community Amateur Sports Clubs (CASC) concerned can take a taxpayer’s donation and, provided all the qualifying conditions are met, can reclaim the basic rate tax which provides an extra 25p for every pound donated to charity.

Higher rate and additional rate taxpayers are eligible to claim tax relief on the difference between the basic rate and their highest rate of tax. This can be actioned through their Self-Assessment tax return or by asking HMRC to amend their tax code.

For example:

If a taxpayer donates £500 to charity, the total value of the donation to the charity is £625. The taxpayer can claim additional tax back of:

• £125 if they pay tax at 40% (£625 × 20%),
• £156.25 if they pay tax at 45% (£625 × 20%) plus (£625 × 5%).

Taxpayers should be aware that one of the conditions of qualifying for tax relief is that you must have paid enough tax (or any tax) in the relevant tax year. The rules state that your donations will qualify for tax relief as long as you have not claimed more than 4 times what you have paid in tax in that tax year. If you have claimed more tax relief than you are entitled to you will need to notify the charity and pay back any excess tax relief to HMRC.

Taxpayers can also give money to charity from their wages using the payroll giving scheme. The scheme allows taxpayers to make a tax free donation to charity directly from their pay or pension if their employer runs a payroll giving scheme, approved by HMRC. 

At Spring Budget 2023, the government announced that with effect from 15 March 2023, tax reliefs and exemptions for charities will be restricted to UK charities. Any non-UK charities that were registered with HMRC for tax reliefs and exemptions as of 15 March 2023, can continue to claim tax relief until 5 April 2024. This means that from April 2024, taxpayers will no longer be eligible to claim UK tax relief on donations to these non-UK charities and the charities themselves will be unable to claim Gift Aid.

There are a number of reasons why you might need to contact HMRC about changes in your income. 

HMRC’s guidance states that this could happen because you:

• did not realise you needed to tell HMRC about it;
• were not sure how to declare it; or
• did not declare it because you could not pay the tax.

For example, reasons you may need to contact HMRC are if you are self-employed, a company director, have annual income over £100,000 and / or have undeclared income from savings, investment, property or overseas income. The £100,000 threshold for the Self-Assessment threshold for taxpayers taxed through PAYE only, has increased from £100,000 to £150,000 with effect from 6 April 2023. However, the Self-Assessment for 2022-23 tax returns remains at £100,000.  

Taxpayers that need to complete a Self-Assessment return for the first time should inform HMRC as soon as possible. The latest date that HMRC should be notified is by 5 October following the end of the tax year for which a Self-Assessment return needs to be filed. If you are required to submit a Self-Assessment return for 2022-23, you should ensure that you file your tax return electronically and pay any tax due by 31 January 2024.

HMRC has an online tool www.gov.uk/check-if-you-need-tax-return/ that can help you check if you are required to submit a Self-Assessment return.

There are two small exemptions from tax that may apply:

• If you make up to £1,000 from self-employment, casual services (such as babysitting or gardening) or hiring personal equipment (such as power tools). This is known as the trading allowance.
• If your annual gross property income is £1,000 or less, from one or more property businesses you will not have to tell HMRC or declare this income on a tax return. For example, from renting a driveway. This is known as the property allowance.

Where each respective allowance covers all the relevant income (before expenses) the income is tax-free and does not have to be declared.

If you have undeclared income, it is always preferable to contact HMRC as soon as possible. We would be happy to assist.

The marriage allowance is available to married couples and those in a civil partnership where a spouse or civil partner does not pay tax or does not pay tax above the basic rate threshold for Income Tax (i.e., one of the couples must currently earn less than the £12,570 personal allowance for 2023-24).

The allowance works by permitting the lower earning partner to transfer up to £1,260 of their personal tax-free allowance to their spouse or civil partner. The marriage allowance can only be used when the recipient of the transfer (the higher earning partner) does not pay more than the basic 20% rate of Income Tax. This would usually mean that their income is between £12,571 to £50,270 for the 2023-24 tax year. The limits for those living in Scotland may vary slightly from these figures.

Claiming the allowance could result in a saving of up to £252 for the recipient (20% of £1,260), or £21 a month for the current tax year. In fact, even if a spouse or civil partner has died since 5 April 2018, the surviving person can still claim the allowance (if they qualify) by contacting HMRC’s Income Tax helpline.

If you meet the eligibility requirements and have not yet claimed the allowance, you can backdate your claim to 6 April 2017. This could result in a total tax refund of up to £1,242 if you can claim for 2019-20, 2020-21, 2021-22, 2022-23 as well as the current 2023-24 tax year. Even if you are no longer eligible, but you would have been in all or any of the preceding years, you can still claim your entitlement.