Demystifying Capital Allowance: What Can You Claim?

 Avoid Last-Minute Panic With Self-Assessment Tax Return Deadlines

Every year, thousands of UK people file their self-assessment taxes before or on the 31st of January, with nearly one-third doing so in the final hour. This year, HMRC anticipates 12.1 million tax return filings, of which 55% have already been received as of December 29, 2020. Given this, about 5.4 million taxpayers will suffer last-minute panic as there is now less than a month to file tax forms.

When Is the Last Day to File Self-Assessment Tax Returns?

The deadline for filing self-assessment tax returns for the fiscal year 2019-20 is January 31, 2021, at midnight. However, most individuals overlook the fact that it is also the deadline for making tax payments, and failure to do so might result in a substantial fine from HMRC. Our expert tax accountants provide incredible tax services to help you understand the hidden traps and complexities surrounding last-minute self-assessment tax return submissions, as well as how to avoid submitting your tax return self-assessment yourself or through an agency and making these mistakes.

Become an HMRC member.

The first step in avoiding late tax filing is to register with HMRC for online filing and obtain a Unique Taxpayer Reference (UTR). If you decide to register at the last minute, you may find yourself in a difficult situation because it might take up to ten working days to acquire the UTR following registration. To be on the safe side, complete your registration process at least 15 days before the deadline.

HMRC recommends registering before the 5th of October in your business's second tax year; otherwise, sanctions may apply.

Prepare Your Tax Returns

It is critical to organise your data in order to rapidly create your tax refund with precise figures while remaining compliant. However, if you're completing your tax returns at the last minute and don't have exact data, it may be acceptable to check the 'estimates' box. You will also need to have an appropriate excuse or a reasonable explanation for why you did not supply precise statistics in order to avoid penalties later on. Ineffective bookkeeping, for example, would not be deemed an acceptable reason for failing to present actual figures.

Please provide complete information.

If you are unsure about the information you are supplying, you can use the 'white space' boxes while filing the taxes online. To avoid penalties and discovery assessments, these fields should be filled with extra information on the information provided. These boxes are part of the filing procedure, and any information provided should be accurate, as HMRC can penalize you if it believes the information provided is false or erroneous. Hiring a personal tax accountant can help you avoid problems at the last minute, when insufficient time and increasing workload can raise the likelihood of late tax filings and greater errors.

The Remittance Basis and Deemed Domicile

The remittance basis plan is offered to UK residents who are not domiciled in the UK and have foreign income and gains. However, as of April 6, 2017, the scheme was no longer open to persons who were judged domiciled on or after that date. As a result, if the above applies to you, you must report all of your income and gains on your return, whether remitted or not.

Costs for personal consumption should be adjusted.

To distinguish the private cost of things used for personal consumption from the corporate cost, an adjustment is required. If you own one of the following businesses, you can change your board and lodging costs by utilising the fixed rate set by HMRC in April 2013:

Hotels

• Public Houses, Guest Houses, and Bed and Breakfast
• Nursing homes

If you consumed stock products, you must account for them at their net realisable worth (selling price). However, if you purchased assets for personal use, you must account for them at cost.

If your accountants use the correct cloud accounting software for accurate record keeping, you may be able to use actual adjusted expenses on a reasonable basis without a lot of time constraints.