It’s Tax Return Information Time!

News, Personal Tax,

It feels like we’ve only just finished one cycle of Personal Tax Returns, but we’ve passed another financial year end, so it’s time to start thinking about the next one!

There are lots of benefits in getting your Tax Return for the year ended 5th April each year completed sooner rather than later:

  1. You can get any refund into your bank account, not HMRC’s!
  2. Know how much you have to pay in good time.
  3. Take any opportunity to reduce July’s Payment on Account, if your income this year is lower than it was in the year ended 5th April 2020, which is likely to be the case for many people!
  4. You won’t run the risk of filing any relevant paperwork away somewhere too safe…
  5. There’s less chance to forget what you did last year.
  6. It gives us more chance to consider your affairs, and suggest ways to reduce any liability. Some of these can affect the current year as well, before we get too far into it.
  7. We don’t have a team so need the paperwork by the 31st July to ensure we can factor the work into our usual schedule.
  8. You can avoid the penalties and stress of leaving it later, and having it hanging over your head as a ‘to do’ until January.
  9. You won’t receive my chasing emails or calls as the deadline approaches… 😊

What information do we need?

Details of ALL worldwide income in the year to 5th April 2021, which may include:

  1. Income from employments (even if you’re a director without any income from that company)
  2. Self Employment – If you’re a Sole Trader, we’ll need to prepare accounts for you, which then feed into your Tax Return. Your accounts year end may not be 5th April, so if you’re unsure what dates we need the information for, please check with us.
  3. Business Partnerships – If you are a Partner, this income information will come from your Partnership Accounts and Tax Return which we’ll prepare for you.
  4. Capital Gains
    1. Details of the sale of any assets – e.g. shares, a second property, your Principal Private Residence.
    2. We’ll need the original cost and purchase date.
    3. Details of the expenditure on any enhancements – e.g. extension costs.
    4. Details of any associated costs, eg Estate Agent & Solicitor fees, broker fees.
  5. Pensions
    1. Amounts shown on P60s as they arrive.
    2. State pension – a copy or the figures from your annual statement.
  6. Property – Including furnished or unfurnished rental properties or holiday lets.
    1. Rental income – details of the gross amounts received i.e. before deductions for agents fees.
    2. Details of all expenses incurred on loans used to purchase properties or secured on them.
    3. Refurbishment costs, though treatment of these will depend on what they relate to, so we’ll need that information as well please.
  7. Interest Amounts
    1. Most interest is now paid gross, but please include the details from the interest certificate you’ll receive if any tax has been deducted.
    2. Details of whether it’s an individual or joint account.
  8. Child Benefit – If anyone in your household earns over £50,000 per year, the Child Benefit is clawed back so we need to know the amounts of Child Benefit received into your household for the year ended 5th April 2021 please.
  9. Income from Trusts – Please let us have the details from form R185, which certifies how much income you’ve received in the year ended 5th April 2021 and any tax that’s been deducted.
  10. Self employed – i.e. NOT Directors. Please ensure that this year you include:
    1. Any business rates grants received in the year ended 5thApril 2021
    2. Any SEISS grants received in the year ended 5th April 2021. Make sure you keep your evidence supporting your decision to claim in case HMRC ask for it.
    3. Details of any Self Isolating payments you may have received in the year ended 5th April 2021

Reliefs – reductions of tax against income detailed above:

  1. Details of any charitable donations made where a declaration has been signed to confirm you pay tax – Gift Aid
  2. Personal Pension Contributions – extends your basic rate band.

Download our checklist below:

How to send us the information…

Using the list above, and last year’s Tax Return as a prompt, please collect all of the details that are relevant to you. Remember to add any new sources of income, for example new savings accounts, income streams etc.

If you’d like a list if the information we included in last year’s Return, please let us know. They can often be a helpful prompt.

You can collect everything into an envelope and send it to us, scan copies into an electronic folder and share it with us, collate the figures onto a spreadsheet or a list and send it to us.

We don’t need to see the original paperwork, but if HMRC should ask for evidence of the information in your Return, you’ll need to provide it. It’s therefore a good idea to keep it all together in case it’s needed. You must also retain this information for six full tax years from the 31st January 2022 filing deadline, which is the period during which HMRC can enquire into your affairs.

Once you’ve gathered everything together, you can post us the original paperwork, or copies, or pop the information into an email. The most secure way to send us everything though is through our Document Exchange on the website, which you can also access through the link on any of our email footers, which may be easier to find once you’ve navigated away from this post!

As ever, we’ll send reminders for the information at various times during the year, but would be very grateful to receive as much information as possible, as early as possible please.

If you’ve got any questions or concerns about what you need to include, please get in touch. The list above may not be exhaustive, so we’ll very happily talk you through what we need as it relates to your circumstances.

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