As we settle into the new year, many will turn their attention to their tax bill, with HMRC’s deadline for filing your self-assessment tax form and paying any outstanding tax bills fast approaching on the 31st of January.

 
Ahead of this deadline, Sarah Hollowell, Tax & Trustee Services Director at Killik and Co, shares her top tips for getting your finances together so you can meet this deadline in as stress-free a manner as possible.
 

What is the 31st January deadline?

 
The 31st January deadline is the date set by HMRC for when you must have done the following:
 

  1. Filed your self-assessment tax return*
  2. Paid any outstanding income tax, capital gains tax and (where relevant) national insurance for the previous year (2022/23).
  3. Made any amendments to the previous year’s (2021/22) tax return.
  4. (For some) make a payment on account of the current year’s (2023/24) liability.

 
If you have left things until the last minute, do try to gather as much information as you can now so that you can submit your return on time.  Do make sure the information you are sending is accurate and that you are declaring everything you need to let HMRC know about.  Saying that, you will have until 31 January 2025 to make an amendment if you have had to use provisional figures.

If you file your tax return after midnight on the 31st of January, you will incur an immediate penalty of £100, even if you have little or no tax to pay. If you are more than three months late, you will receive further charges equal to £10 a day, all the way up to £900.

As well as penalties for failing to submit your tax return on time, interest accrues on the late payment of tax if this is unpaid after midnight on the 31st of January. The rate is currently 7.75%.  It’s especially important for those who are likely to have a large tax bill to pay on time as it’s very easy for this interest to accumulate into a rather large sum.

As such, we recommend that even if you’re unable to get your return in, you make a tax payment by the end of the month. If you are a little bit off with your calculations, you’ll still be paying interest on a lower sum than the original bill.

While preparing your tax return and the accompanying calculation of your tax position, it’s a good time to check that the previous year’s return (2021/22) was correct and that all reliefs and allowances have been claimed.  For example it’s always surprising how many people forget to claim the higher rate (or additional rate) tax relief they’re entitled to on pension contributions.  31 January 2024 is the last date that an amendment can be made to that return so you could lose out.

Now is also an important time to start thinking about how you are going to raise funds to pay off your tax bill. This again is especially important for those who are expecting to have a significant amount to pay. Something else to take into account is allowing enough time for your payments to clear.

(* If you haven’t received a tax return but received reportable income or gains during 2022/23, you should have notified HMRC by 5 October 2023.  If you haven’t done so, let them know as soon as possible to keep penalties and interest to a minimum).
 
In review, remember the following things:
 

  1. Get your return in and pay any outstanding tax asap, even if the amount may not be completely correct /
  2. Remember that you have a year to make any amendments
  3. Check last year’s tax return to ensure all allowances and reliefs have been claimed
  4. Think about raising funds for a tax bill now
  5. Give time for your payments to clear

 



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