Happy New Tax Year!!
6th April 2022
For many working in the tax industry the 6 April is a time of celebration, of course it is not a matter of grooving the night before and counting down the clock, however it heralds the opportunities provided by the newly introduced tax legislation. At the same time there is also the reflection of what happened in the previous year, which of course leads onto the question of completing your personal tax returns.
Since self-assessment tax was introduced in 1997, there has been phenomenon known as the annual tax season, and this is where you will find the tax department working long days and late nights completing tax returns up to the 31 January each year.
One important aspect of the whole process is advising how much tax is due and when tax is paid under self-assessment. At present tax can be paid twice a year, so on 31 January and 31 July. The January payment represents a payment on account and if required the balancing payment, with the July payment simply being a payment on account.
Although when can you complete and submit your tax return? In most cases the tax software used will be available by at least the end of April, you should have your employment information by mid-May at the latest and other forms of income from third parties perhaps in June.
If everything is provided, processed, and submitted before 31 July, then perhaps your payment on account can be reduced. If this is possible then it provides you with a cash flow advantage. Here is an example –
- Tax return for 2021/22
- Completed and submitted before 31 July 2022
- Payments on account for January and July 2022 can be reduced if required
- You will know if there is any requirement to make a balancing payment in January 2023
- Payments on account for January and July 2023 will also be known
Having this information can be extremely important to you when you are looking at your cashflow position.
In the next few weeks, you will receive contact from us to request your tax information, and perhaps if cashflow is an issue with you, you may wish to provide that information earlier to allow for it to be processed and the return submitted, it can also allow for further discussions and advice
Disclaimer - All information in this post was correct at time of writing.
