The Deadline Looms

As you might imagine at this time of year, I am up to my eyes in tax returns.

A reminder in case you have missed my previous warnings, midnight on Tuesday is the deadline for filing your self assessment return and failure to do so will result in a £100 penalty regardless of whether you have any tax to pay.

It still might not be too late. I can’t make any promises, but if I receive paperwork in the coming days, I and my team may still be able to ensure a penalty is avoided. Last year almost 600,000 returns were filed on the last day, including several at Lerman Jacobs Davis. We’d like to increase our share of that number

Approximately 1 Million returns were filed late last year and with the stricter conditions this year, the treasury is set to net a small fortune. As you know, my role is to minimise the amount the treasury earns and keep this money in my clients’ pockets. Minimising tax is one way, but avoiding penalties is a much easier way of saving clients money.

The ICAEW are warning all self-assessment taxpayers to check what constitutes a reasonable excuse before missing the January 31 online deadline. Jane Moore from the ICAEW says: "What is reasonable depends on your situation. It may be valid if an unexpected or unusual event prevented you from meeting the deadline." HMRC, though, will not accept excuses such as the return being "too complicated", that you were too busy or that you didn't have all the information. "You must file as soon as possible after the reasonable excuse comes to an end," adds Moore. Elsewhere, The Sun’s Cashflow column claims that a HMRC source has admitted to them that their website will struggle with the number of people expected log on to file their tax returns on the deadline day. The column warns that 600,000 businesses are expected to try to file their forms to HMRC on that day, with estimates suggesting that 90,000 will be baffled by the complexity of the form, and that anyone hoping for over the phone help could be in for a long wait as the call centre workers will be on strike

So the referral I am looking for this week, is anyone who hasn’t yet filed their tax return and wants to avoid a penalty. Please get in touch mitch@ljd.uk.com

Mitch the Tax Man

New Year - New Tax Tips

Happy New Year to you all!

January is traditionally a very busy month for those that work in tax. However please do not worry I will be posting my tax tips up for my dedicated readers every week this month.

1. Did you know HMRC are now accepting tax payments through the faster payment service? It is important to note however that they do charge interest for any late payments so make sure you pay on time

2. In light of HMRC's revised interpretation of the pension carry forward rules for the unused allowance in respect for the tax years 2008/09 to 2010/11 are you or your clients affected? It may be worth recalculating your tax based on the pension figures.

3. It is common for a property to be owned by the company director or shareholder and then rented to the limited company. If this applies to you then you really need to consider the tax implications sooner rather than later because there maybe a reduced or no entitlement to entrepreneurs relief.

4. The European Commission has approved for state aid purposes the increase in the small and medium sized enterprise research and development relief to 200% from 1 April 2011. Does your business activities/expenditure qualify for research and development? Take advantage of this generous relief.

5. HMRC has advised that correspondence goes missing because tax payers do not give their National Insurance or Unique Tax Reference Number as references. Make sure when writing to HMRC you always put at least one of these as a reference

I hope you have found these useful. I am now going to get back to my tax returns however if you have any questions please do not hesitate to contact me or alternatively if you know of anyone panicking about completing a tax return by the end of the month pass them on to me.


All the best


Mitch the Tax Man
mitch@ljd.uk.com