Last chance saloon before tax deadline

Leading south Wales accountancy firm, ktsowensthomas, is warning the estimated nine million people who have to file a self-assessment tax form by the end of January that the clock is ticking.

High earners, the self-employed and those with more than one source of income that fail to send their tax returns to HM Revenue & Customs before January 31 could face an automatic £100 fine, with interest accruing on money owed.

Facing the additional challenge of filing online those that have left it to the last minute could be entering last chance saloon.

ktsowensthomas’ tax expert, Kate Moore, says: “If this is the first time you’ve completed an online form and you’re hoping to beat the January 31 tax deadline, you need to log onto the HMRC website immediately to register for an ‘activation code’ and password. This is sent by post and can take up to a week to arrive.

“Filing online is a problem the closer you get to the deadline as servers often crash during busy periods. During the last week in January the system is likely to be overloaded with people making last minute entries so the sooner you can do it the better.”

The Business Payment Support Unit, which has been very well received during the recession, has been fortunately extended by the Government. The Business Payment Support Service allows tax payers to arrange an affordable payment timetable, allowing them to make payments over a longer period.

However warns Kate, “If you want to apply to the Business Payment Support Unit to arrange a payment plan for your 31 January liability you need to do this before the payment becomes due, so before 31 January, and you need to know your tax liability.

“Again this unit is likely to be busy as we reach the end of January so don’t leave it until the last minute and panic if you can’t get through.”

Those whose income has fallen since April 2009 can elect to reduce payments on account. Continues Kate: “If you think your income has fallen due to falling profits as a result of the economic downturn, for example, and you will earn less in 2009/10 than you did in 2008/09, you can elect to reduce your payments on account.

“If you give your tax adviser enough notice they may be able to make a claim to reduce the payment you make in advance for 2009/10. But you do need to take care because if you reduce the payments on account more than you should have interest will be charged on the difference.”

With the snow disrupting many businesses across the country, filing a self assessment tax form maybe the last thing on people’s minds. However ktsowensthomas is warning these businesses not to make their own situation worse particularly when there are penalties imposed if the deadline is missed. Adds Kate: “It will be interesting to see if HMRC are sensitive to the very disruptive weather conditions the country has faced of late and extend the deadline. However, my advice would be not to wait and see but to act immediately.”

ktsowensthomas is a firm of accountants, tax and business advisors with a head office in Cardiff Bay and a regional office in Aberdare. For more information contact Kate Moore on 029 2082 9000.

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