Xmas Tax Tips

Over the past week I have been snowed in. No, not by snow by 100's of tax returns! I still have around 150 to complete by the end of January and no doubt I will be working over the festive period. However this is the name of the game when it comes to tax and it is Xmas I have made sure I spend some time preparing my tax tips blog just for you. So here are 5 tax tips for xmas:

1. It is very important that you are all aware that new penalties will apply for tax return that is submitted after the 31 January deadline. An initial £100 fixed penalty, will apply even if there is no tax to pay. After 3 months additional penalties of £10 a day, up to £900 and after 6 months a further 5% of the tax due! Get them in

2. Make sure those who of you provide a service on a self - employed basis have a water tight contract. For example important factors to include within a contract are mutuality, control and the right to organise a substitute.

3. Remember if you are a partner in a partnership you will have to complete a specific partnership tax return as well as filling in the partnership pages of your personal self assessment tax return.

4. I have mentioned before about some of the tax benefits of sharing income evenly between husband and wife however a new opportunity has recently come to my attention in this regard. If a partnership is created between husband and wife, and say the wife is designated as a sleeping partner, i.e. she does no work at all for the business, she is able to receive whatever share of the profits is desired and will incur no national insurance liability on her income whatsoever. This means that (depending on the overall profit) it makes probably sense to give the wife the majority of the profits as there is no national insurance for her whereas there is for the husband

5. A final reminder for Private tutors and coaches that you have less than a month to tell HMRC about any tax you may owe for not declaring your private work income. Under the tax catch up plan, teachers with previously undisclosed earnings must register by 6 January 2012 to benefit from the terms of the offer.

I wish you all a very merry Xmas and a happy and healthy new year and remember if you have not got your loved one a present yet how about a voucher from me to complete their tax return.


Mitch the Tax Man
mitch@ljd.uk.com