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Late with your tax return and tax payment? What happens now?

Missed the Tax Return Deadline? What Happens Now?

February 3, 2023/in 2021, 2021-22, 2022, 2023, Accountancy, Accountants, Appeal, Deadline, Filing deadlines, HM Revenue and Customs, HMRC, Key dates, Late return, London, Online returns, penalties, Refund, Self-assessment, South London, Tax, Tax accountants, Tax advice, Tax advisers, Tax bill, Tax refunds, Tax returns, Taxfile, Tulse Hill/by Mark

[February 2023]: If you missed the deadline to submit your self-assessment tax return, the first thing to know is that you are now into the penalty stage. HMRC applies an automatic £100 penalty to those who are even 1 day late (the deadline was 11.59pm on 31st January) and further penalties are added if you take even longer to comply. It’s worse, of course, if you also haven’t paid any tax owed as you’ll then owe interest too, so our advice is to pay as much as you can as soon as possible, so you’ll reduce any element of interest. However, if you “took reasonable care to meet” a deadline and there is a genuine reason why you were late, you have the option to appeal if your circumstances fit eligible criteria. Let’s take a look … Read more

Tax-Free Personal Allowance Thresholds & Tax Bands (2022/23 to 2016/17)

May 28, 2022/in 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, Accountancy, Accountants, Annual threshold, Band rates, Dulwich, HMRC, London, Personal allowance, Personal Tax Account, South London, Tax, Tax accountants, Tax advice, Tax advisers, Tax calculation, Tax-free allowance, thresholds, Tulse Hill/by Mark

Today we look at the tax-free allowance thresholds for what’s officially known as the tax-free Personal Allowance in the tax and accountancy world.

The Tax-Free Personal Allowance

This is the amount a UK individual can earn as income before they have to pay any Income Tax. In the current tax year (6 April 2022 to 5 April 2023) individuals can earn up to £12,570 before they have to start paying Income Tax, as you’ll see in the first table. In other words, if their taxable income is two thousand pounds more than that, they’ll only have to pay income tax on the extra £2000, not the core £12,570. There are exceptions, and different rules applied before 2016/17, but our aim is to keep things simple in this guide rather than focusing on more rare exceptions. So, below, we show the Personal Allowance thresholds for tax-free income over the last 7 tax years. As you will see, the Tax-Free Personal Allowance has gradually increased over the years.

Tax Bands for Basic Rate, Higher Rate and Additional Rate Taxpayers

The tables also show the various tax bands for earnings above the Personal Allowance threshold. These are the Basic Rate, Higher Rate and Additional Rate income tax bands, with tax rates increasing the more people earn. The information might be useful if you owe income tax from previous years but bear in mind that anyone born prior to 6 April 1948 may be entitled to a larger Personal Allowance.

Please note: this guide focuses only on Income Tax. Taxpayers will also need to allow for other deductions like National Insurance, which we’ll cover in a separate guide, and things like pension contributions, any student loan interest repayments, any tax on dividends, and so on.

Tax-Free Allowance Thresholds 2022/23

For the tax year 6 Apr 2022 to 5 Apr 2023:
The first £12,570 (your Personal Allowance) is tax-free*
Earnings between £12,571 and £50,270 are taxed at 20% (‘Basic Rate’ income tax)
Earnings between £50,271 and £150,000 are taxed at 40% (‘Higher Rate’ income tax)
Earnings over £150,000 are taxed at 45% (‘Additional Rate’ income tax)

* For every £2 earned above £100,000, the Personal Allowance is reduced by £1. It therefore reduces to zero for earnings of £125,140 or more.

Tax-Free Allowance Thresholds 2021/22

For the tax year 6 Apr 2021 to 5 Apr 2022:
The first £12,570 (your Personal Allowance) is tax-free*
‘Basic Rate’ earnings between £12,571 and £50,270 are taxed at 20%
‘Higher Rate’ earnings between £50,271 and £150,000 are taxed at 40%
‘Additional Rate’ earnings over £150,000 are taxed at 45%

* For every £2 earned above £100,000, the Personal Allowance is reduced by £1. It therefore reduces to zero for earnings of £125,140 or more.

Tax-Free Allowance Thresholds 2020/21

For the tax year 6 Apr 2020 to 5 Apr 2021:
The first £12,500 (your Personal Allowance) is tax-free*
‘Basic Rate’ earnings between £12,501 and £50,000 are taxed at 20%
‘Higher Rate’ earnings between £50,001 and £150,000 are taxed at 40%
‘Additional Rate’ earnings over £150,000 are taxed at 45%

* For every £2 earned above £100,000, the Personal Allowance is reduced by £1. It therefore reduces to zero for earnings of £125,000 or more.

Tax-Free Allowance Thresholds 2019/20

A Personal Message from Guy Bridger at Taxfile

January 29, 2022/in 2020, 2021, 2022, Accountancy, Accountants, Advice, Deadline, Dulwich, Filing deadlines, Guy Bridger, HMRC, Income tax, Late return, London, Online returns, payment plans, payments on account, penalties, Self-assessment, Self-employed, Sole traders, South London, Tax, Tax accountant, Tax accountants, Tax advice, Tax advisers, Tax agents, Tax calculation, Tax returns, Taxfile, Tulse Hill/by Taxfile

Dear Taxfile Client,

We’re aware that many people are struggling right now. So, I wanted to personally touch base with you to confirm that, although the official deadline for submission of 2020/21 self-assessment tax returns and tax payments is Monday (31 January), there is now some extra time this year. This is great news for you if you are concerned about missing the deadlines or having to pay an HMRC penalty for being late. It should really take the pressure off for those who are struggling or worried.

For self-assessment tax returns, you now have until midnight on 28 February to submit. HMRC will only charge you a late filing fee if you file later than this.
For self-assessment tax payments, you now have until 1 April to make your payment (or arrange an HMRC payment plan) before incurring an HMRC late tax payment surcharge. While you will still incur interest for late tax payments from 1 February, HMRC’s interest rate is only 2.75% per annum, so even a month’s interest is unlikely to equate to much for most people.
For tax payments on account (payment in advance for the next tax year), there is no HMRC surcharge/penalty if you’re late but it does attract interest. However, again, that’s only at HMRC’s low rate, so is unlikely to amount to much for most.

We are here to help you, so don’t worry if you owe tax or are running late on your tax return. The Taxfile team can help you sort things out, particularly as we have a little longer than usual. We can work something out during February if you are worried about HMRC surcharges, interest and deadlines. Please get in touch if so.

020 8761 8000 Book Appointment Get Started Here

Lastly, don’t forget that we are open on Saturdays during January and February (by appointment) and open later (until 6pm) on Mondays and Tuesdays. Read more

Christmas & New Year Opening Times at Taxfile

December 22, 2021/in 2021, 2022, Accountancy, Accountants, Accounts, Annual Return, Christmas, Limited companies, London, Opening Times, Self-assessment, Self-employed, Tax, Tax accountants, tax rebates, Tax refunds, Tax returns, Taxfile, Tulse Hill/by Mark

Season’s greetings to all our clients and readers and sincere thanks to all of you who have kept us busy with work during 2021 — we really appreciate it.

Here’s a quick reminder of our opening times during the Christmas period and into the New Year. This is for our Tulse Hill office (Thurlow Park Road) and our Dulwich office (Turney Road) except where otherwise indicated.

Friday 24 December 2021 (Christmas Eve): we’re open from 9am until 3pm (Tulse Hill office only).
Saturday 25 December 2021 (Christmas Day): closed.
Sunday 26 December 2021 (Boxing Day): closed.
Monday 27 December 2021 (a public holiday): closed.
Tuesday 28 December 2021 (a public holiday): closed.
Wednesday 29 December 2021: open 9am until 5pm.
Thursday 30 December 2021: open 9am until 5pm.
Friday 31 December 2021: open 9am until 3pm (Tulse Hill office only).
Saturday 1 January 2022 (New Year’s Day): closed.
Sunday 2 January 2022: closed.
Monday 3 January 2022 (a public holiday): closed.
Tuesday 4 January 2022: we re-open from 9am until 6pm.
Wednesday 5 January 2022: open as usual, 9am until 5pm.
Thursday 6 January 2022: open as usual, 9am until 5pm.
Friday 7 January 2022: open as usual, 9am until 3pm (Tulse Hill office only).
Saturday 8 January 2022: open 9am until 1pm by appointment (Tulse Hill office only).
Sunday 9 January 2022: closed.
From week commencing Monday 10 January: open as usual (see footer).

Have You Contacted Taxfile About Your Tax Return Yet?

If you need a self-assessment tax return or any other kind of return and haven’t yet arranged it with us, please arrange an appointment urgently. January becomes frantically busy in the accounting world, so please make the most of the remaining December appointments while they’re still available — thank you. Appointments are by telephone, Zoom, Microsoft Teams, in person (under safety protocols) … Read more

Harnessing Technology at Taxfile

July 8, 2021/in 2021, Accountancy, Accountants, Accounts, Bookkeeping, Buy to let, Cab drivers, Capital gains tax, CGT, CIS, Construction Industry Scheme, Devon, Dulwich, Furnished Holiday Lettings, IHT, Income tax, Landlords, Lettings, Lettings income, Limited companies, Limited company, London, Partnership, Self-employed, Sole traders, South London, South West, Tax, Tax accountants, Tax advice, Tax advisers, Tax refunds, Tax returns, Tulse Hill, VAT/by Taxfile

The rapid pace of technological change has caused some of the biggest shifts in how we view and process our tax returns. At Taxfile, we’re constantly striving to use technology as effectively as possible to aid us in collecting, analysing, and collaborating when working on your personal data.

Over the pandemic, we’ve had to place our reliance even further on technology to maintain our standards, with regular meetings online. We’re constantly improving the efficiency of our work pipeline and, with the ability to pull figures directly from online bank statements, we can ensure precision in the numbers we present you with. For the last two years, we’ve implemented cloud technology as both a collaborative tool between our senior and junior staff and as storage for various databases used to track everything from employee working hours to the status of your tax return. We’re expanding further on this concept in collaboration with Pure Technology by merging our existing cloud systems with our current remote work solution to form one, all-encompassing workspace environment. Hosting it in the Microsoft Cloud ensures that, with the help of our office staff, your paperwork and bookings can be sent to and viewed by your tax agent as soon as possible. This and a variety of other endeavours are examples of our ambitions to be at the forefront of innovations, and constant review of our policies ensures we remain ahead, or on track, to meet the standards set by Making Tax Digital (MTD) for its 2023 launch.

Contact South London’s Favourite Accountant

Taxfile can help you with all your tax or accountancy requirements. We offer Read more

PAYE, 2021/22 Tax Thresholds, Employment Allowance & P800s

June 8, 2021/in 2021, 2022, Accountancy, Accountants, Accounts, Bookkeeping, Devon, Dulwich, Employment allowance, FreeAgent, Higher rate tax payers, Income tax, Limited companies, London, NI, NIC, NIC's, P800, Pay-as-you-earn, PAYE, Payroll, Personal allowance, Sage, Software packages, South London, South West, Tax, Tax accountants, Tax advice, Tax advisers, Tax bands, tax rebates, Tax refunds, Taxfile, Tulse Hill, VAT, Xero/by Taxfile

My name is Daniel and I have been a part of the Taxfile family since 2007. It started as a part-time job doing bookkeeping, but as time went on, I developed new abilities and a deeper understanding of the tax world. PAYE, VAT, and Company Register are now my areas of expertise.

I understand how complicated the tax world is, so here are a few PAYE things to consider:

Understanding the tax thresholds for 2021-2022

PAYE is calculated based on how much you earn and whether you are eligible for the personal allowance.

Standard Rate: PAYE income tax is charged at 20%, less a personal allowance of £12,570, this is signified by tax code 1257L.
Higher Rate: For most, income over £50,270 to £150,000 is charged at 40%.
Additional Rate: Income above £150,000 is charged at 45%.

What is the Employment Allowance?

The Employment Allowance allows certain businesses that employ workers to reduce their annual National Insurance (NI) bill by up to £4,000 (for the 2021/22 tax year).
Eligible businesses can claim a reduction against their employer’s Class 1 NI liability up to a maximum of £4,000 each tax year. You can still claim the allowance if the liability was less than £4,000 in a tax year.

You can’t claim if you’re a company with only one employee paid above the Class 1 National Insurance Secondary Threshold (£8,840 for the 2021/22 tax year, up from £8,788 for the 2020/21 tax year) if that employee is also a director of the company.

How will I know if I haven’t paid the right amount of PAYE?

HMRC will send out a P800 tax calculation form after the tax year ends on 5 April, which you should receive by the end of November. This will show how much tax is due to be refunded, or is owed for previous years.

Another significant aspect of Taxfile is that it works with a wide range of accounts software (Sage, QuickBooks, Xero, FreeAgent, VT, Forbes, Moneysoft, and so on) and can accommodate everyone. These are just a few examples, but if you need assistance with any area of PAYE, VAT, or other types of tax, Taxfile and the team are here to help. Call Taxfile on 020 8761 8000, book a free appointment (in-person and phone or video call options are available) or simply message us your tax-related query and we’ll be happy to help. We are accountants and tax experts in South London and the South West.

This post was brought to you by Daniel at Taxfile.

Peace of Mind from Using an Experienced Tax Team

June 3, 2021/in 2021, Accountancy, Accountants, Accounts, Advice, Bookkeeping, HMRC, Income tax, London, Self-assessment, SME, Sole traders, South London, Tax accountant, Tax accountants, Tax advice, Tax advisers, Tax agents, tax experts, Tax return, Tax returns, Taxes, Taxfile, Tulse Hill/by Taxfile

When using Taxfile, you are using an experienced team that will make dealing with your tax affairs seamless. A lot of clients start by coming into our office stressed and overwhelmed, not knowing where to start. Using your current position and needs, we plan a step-by-step approach to keep you on top of your affairs and the relationship between you and HMRC harmonious. Once you are officially on board with us, we will have access to your HMRC record and, with our dedicated agent lines to HMRC, we’ll be able to speak to them on your behalf. This way, you are free from having to call them yourself and wait longer than we do for a call handler. You can also have any issues or queries explained to you in an easy to understand way by our friendly team. If you receive any letters that from HMRC and you don’t understand anything, we will be able to take a look for you and explain what it’s all about.

Any fee you pay Taxfile is tax deductible, so will be put on your tax return and result in a reduction of tax.

Our up-to-date knowledge of the tax system will give you peace of mind, alleviate any anxiety you may have and make the whole experience very different to how a lot of people find it when they are not using a team like ours. We know the best way to approach a tax situation that, without our experience and knowledge, could otherwise result in a lot more time and money being spent unnecessarily. From something as small as missing a tax return deadline, it can spiral into something a lot bigger, potentially including penalties, late payment interest, debt collection agencies being involved and so on. We inform all our clients of upcoming deadlines, for their particular tax situation, and let them know what needs doing and when, avoiding this situation and many more.

Unlike a lot of other companies, our tax experts and accountants are approachable, accessible and happy to help. We’re a unique tax advisor and accountancy practice like no other, with offices in Tulse Hill, Dulwich and Devon. We can help with any tax-related issues, including bookkeeping, filling in a tax return, limited company accounts, help accounting for property lettings, tax refunds and anything accountancy-related. Call Taxfile on 020 8761 8000, book a free 20-minute appointment with us (remote or in-person options available) or simply email us your tax-related query here.

This post was brought to you by Julie at Taxfile.

Tax “Payment Plans” are ENDING – Act NOW if you Owe Tax!

March 31, 2021/in 2019, 2020, 2021, Accountancy, Accountants, HMRC, Income tax, Late return, London, payment plans, penalties, penalty, Self-assessment, Tax advice, Tax bill, Tax return, Tax returns, Tulse Hill/by Mark

Are you late paying your tax? Do you owe unpaid tax for the last financial year, or earlier? Are you struggling to pay it?

Taxfile has recently been helping some of our customers with tax debts from 2019/20 and earlier. In particular, we’re helping them to arrange payment plans with HMRC as part of their ‘Time to Pay‘ scheme. This spreads the cost of those tax debts instead of paying them off in one go. This is really useful to those who are struggling financially following the pandemic. The new payment plans are only available until 1 April 2021, though, so really you should apply by 31 March 2021. Our advice is to act now if you are in a position to take advantage of the payment plans while they’re still — just about — available.

The benefits of arranging a tax payment plan now

Agreeing a payment plan with HMRC will help avoid the 5% late payment penalty that’s usually charged on outstanding tax not paid by the deadline. And, of course, spreading the cost helps those who might otherwise struggle to get together the full amount in one transaction. The HMRC interest rate seems relatively low too.

How Tax Payment Plans have gone so far

What we’ve found so far is that Read more

Taxfile Partners with Local Government to Offer Self Assessment Assistance

January 8, 2021/in 2020, 2021, Advice, BBLS, Bounce Back Loan Scheme, coronavirus, Coronavirus, COVID-19, COVID-19, HM Revenue and Customs, HMRC, Income & Expenditure, Income tax, London, Pandemic, Pandemic, SEISS, Self-assessment, Self-employed, Sole traders, South London, Uncategorized/by Taxfile

With the self-assessment tax deadline looming in the midst of a global pandemic and no announcement of an extension from the government (28 days would do), 5.4m* taxpayers (45%) still needing to submit a tax return before the 31^st January and many of those are left feeling hopeless and helpless, unsure how to complete it themselves and having difficulty finding or affording an accountant who can do it on their behalf.

Some will attempt to complete the tax return online themselves but without a Government Gateway ID that task will be impossible. Obtaining the Government Gateway ID would require having their ID checked and confirmed online and without a valid UK passport and/or driving licence the task will lead to long phone calls on hold waiting for a HMRC advisor, who are currently running somewhat of a skeleton crew as a result of the pandemic (at least that’s the impression given due to the long waiting times even on the authorised agents helplines and the reduced opening hours).

Even if you do have Government Gateway ID (and password), you will need to work through HMRC’s Self-Assessment form, deciding which of the sections are relevant to you & compiling the information required for each part. Take a look at these help sheets especially useful for people with self-employed earnings (some of the business income references use the word business which can confuse as the rules and guidelines are equally applicable to sole traders working for themselves).

Also check out the HMRC’s toolkit: https://www.gov.uk/government/publications/hmrc-business-profits-toolkit.

You will need to accurately assess all your business income and more so, expenses, ensuring the correct figures are entered and submitted. Knowing what expenses you can and can’t claim can really have a negative or positive effect on the tax bill you will be presented with at the end but how do you ensure you are paying the correct amount of tax?

Looking for assistance from HMRC’s website can provide some valuable information if you know what you are looking for (see the help sheets mentioned above) but from the distance, for the everyday taxpayer, this task can be rather daunting. Finding personal help, assistance, and guidance can be difficult, especially when the people that can help those most are currently experiencing their busiest period in the industry whilst coping with the effects of COVID on their workforce.

Many may opt for the avoidance strategy until the £100 late filing penalty lands on their door and further threats of daily fines & interest kicks them into action. You will have a ground to appeal any fines or penalties if you have been affected by COVID. This will involve writing a formal letter to HMRC and providing any evidence they may request to overturn the fine.

We do recommend that however hard it maybe, it’s a good idea to put some money on your HMRC self-assessment account to settle last year’s tax if you can at least estimate it because at the end of February any tax still outstanding from the previous year which ended 05/04/20 will attract a surcharge which is almost impossible to appeal against so give it a go and work out your taxable profit and then put it in this calculator so you can guesstimate how much you need to rustle up.

If you need an injection to your cash flow even if you were eligible and claimed for the SEISS grants, we would strongly recommend you apply for the Bounce Back Loan Scheme (BBLS) if you have not done so already. This can be done via your bank provider online & in many cases they may require you to open a business bank account. You are then eligible for a maximum of 25% of your 2018/19 business turnover (a minimum of £2k and maximum amount of £50k being leant). The interest rate for this loan is 2.5% for 6-years and the government will pay the interest for the first 12-months of the loan.

Taxfile is currently working closely with local government and our director is on the board of the local business improvement district, we like to think of ourselves as the local tax office for the people of south London, we may be able to give you a little help along the way so why not give us a call for a free 20 minute confidential chat on 020 8761 8000

*figure correct on 01/01/21

Tax Returns for Self-Employed Londoners – Special Offer!

April 17, 2020/in 2018, 2019, 2020, Accountants, CIS, Construction Industry Scheme, London, Online returns, penalties, Self-assessment, Special Offers, tax rebates, Tax refunds, Tax returns/by Mark

Are you self-employed? Are you late filing your 2018/19 Self-Assessment tax return? If so, now is the time to get Taxfile to sort it out for you.

There are 4 important reasons why you should file your tax return now:

1. Save money, with our special offer!

For a very limited time, we are offering to do 2018-19 Self-Assessment tax returns for self-employed Londoners for just £199 + VAT (our usual pricing is from £277 + VAT). That’s a saving of nearly £94 including VAT.

2. Stay eligible for Government Help during the lock-down

Self-employed people who are struggling financially during the coronavirus lock-down may be eligible for financial help from the Government. This is in the form of their recently announced Self-Employed Income Support Scheme (‘SEISS’). However, to remain eligible, you must have filed your 2018/19 Self-Assessment tax return by 23 April. If you miss that deadline, you will no longer be eligible for that Government assistance.

3. Avoid severe fines from HMRC for being so late

The original deadline for submission of your 2018/19 Self-Assessment tax return was actually 31 January 2020. So, if you didn’t already file your tax return by that date, you already owe HMRC a fine of £100 minimum. That’s nothing, though, compared to the penalties they will start charging you after April. From 1 May, you will owe an additional £10 per day, every day from that date if you still haven’t filed your 2018/19 tax return. So, for example, after a week you’ll owe the original £100 plus an additional £70 as a minimum, or the £100 plus a further £140 after two weeks and so on. You may also be charged interest on top of all of that if you owed HMRC a tax payment on the original 31 January deadline and still haven’t paid it.

4. You may be due a tax rebate

Some self-employed people may be due a tax rebate. This depends upon your