As a new tax year rolls in, hundreds of thousands of people will have recently paid off their annual self-assessment tax bill. And this year, with the rising cost of living, many people will have taken the option to spread the cost.
Here, John Oakley, Taxation Director at Beatons, gives an overview of HMRC’s Time to Pay facility and an insight into how Beatons have helped clients file their tax returns this year – plus the many benefits of using a chartered accountant to file your tax return.
This week, HMRC released figures stating that 142,000 people have used online payment plans to pay their tax bill since April 2021.
The Self-Assessment deadline for 2020/21 tax returns was January 31 but, this year, HMRC gave customers until April 1 to pay any tax owed and not face penalties.
Customers who were unable to pay in full but had a tax bill under £30,000 could use the online Time to Pay service to spread the cost into monthly instalments. Those who owed more than £30,000 or needed longer to pay could still use Time to Pay but had to contact HMRC to arrange it.
Any Self-Assessment customers who missed the April 1 payment deadline face a 5% late payment penalty on any outstanding tax from the 2020/21 tax year.
This year, Beatons have helped 421 clients to file their returns on time and collected refunds of over £392,000 for clients.
While HMRC do have a relatively straightforward online service for filing and paying tax, it is worth remembering that there are many benefits to seeking professional assistance in doing so.
Why it pays to employ a professional
At Beatons we have a thorough awareness of the tax reliefs available as well as an awareness of allowable deductions. For example, did you know that carpenters can claim a flat deduction of £140 for repairing and maintaining their equipment? Or that uniformed deck crew can claim £1,022? And there are lots of other tax allowable deductions related to travel or home working costs.
Ease your worries
Tax can be a daunting subject, particularly if you’re unsure what you owe or what you might need to tell HMRC about. At Beatons, our knowledge and advice can help ease your mind. We have awareness of payment arrangements for example, which are particularly useful if you have missed the deadlines and penalties are piling up. It could be that you need help bringing it all up to date – we can certainly support with that. Or perhaps you haven’t been issued a return and you are having sleepless nights about something you think you might have to tell HMRC about from a few years ago – whatever your worry, we can advise.
Make sense of official letters
Sometimes, official correspondence from HMRC can seem more alarming than it really is. HMRC uses psychologists to craft letters that may scare a response from recipients, causing fear and distress. Using a chartered accountant like Beatons offers a level of protection against this as we explain these letters in understandable terms and clarify what happens next. And often we can tell you that you don’t really have anything to worry about!
Manage through turbulent times
Having the support of an accountant can mean people are able to make the best of uncertain and turbulent times. During recent years, incomes have fluctuated dramatically, and this means that often tax payments on account are too much or the amount of tax your employer is deducting via PAYE is too high. We make sure our clients don’t pay any tax they don’t need to and that when they have, they get it refunded to them as soon as possible.
Certainty for HMRC
HMRC sometime risk profile taxpayers – this means they look to consider if a taxpayer is likely to be acting within the law and filing an honest return. A factor within that profiling may be that they look to see if the taxpayer is represented and if so, does the agent have a good reputation.
Having Beatons representing you provides certainty for HMRC that your submission has been prepared by a professional and will conform to tax laws as we do not engage in tax avoidance schemes and HMRC will be confident that they do not need to check any returns prepared by us.
For help and advice please contact us: email info@beatons.co.uk or call 01473 659777