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Tax deadline: Last day to file return is today – here are last-minute ways to reduce your bill

Don't delay: penalties for late tax returns involve an initial fixed penalty of £100, which applies even if there is no tax to pay

Self-employed people and others who need to report their income to HMRC have just hours to complete a self-assessment tax return, before the midnight deadline tonight.

As of January 26, nearly 2.7 million people had yet to file, according to tax records.

With just over 12 million taxpayers expected to do so this year, that means more than one in five people delayed filing until last week.

Don't delay: penalties for late tax returns involve an initial fixed penalty of £100, which applies even if there is no tax to pay

Don’t delay: penalties for late tax returns involve an initial fixed penalty of £100, which applies even if there is no tax to pay

What is the fine for a late tax return?

Those who fail to meet today’s deadline face an initial fixed penalty of £100, which applies even if there is no tax payable.

After three months, additional daily penalties of £10 per day, up to a maximum of £900 will be added.

Then, after six months, an additional penalty of 5% of the tax due or £300, whichever is greater, will be charged. After one year an additional charge of 5% or £300 will be added.

If someone files their return form, but doesn’t pay what they owe by the January 31 deadline, they will be charged 5% of the 30-day, six-month, and 12-month unpaid tax.

Trusha Shah, tax manager at accounting firm HW Fisher, said: “It’s important to make sure you complete your tax return on time.

“Otherwise you will face a £100 fine – and this will increase if your return is more than three months late.

“Particularly if you are making a payment from overseas, allow extra time as there are sometimes processing delays.

“For more information on how to pay or to set up a payment plan, visit the HMRC website which has many useful resources.”

Need to complete a tax return?

Anyone who is self-employed and has received or earned untaxed income in excess of £1,000 must file a return for the 2021/22 tax year.

The same applies to those who earned £100,000 or more in the last tax year or who were partners in a business partnership.

The tax year ran from April 6, 2021 to April 5, 2022.

You may also need to file a tax return if you are not self-employed but still have untaxed income. This could include income from a side business or self-employment, from the rental of real estate, tips and commissions, income from savings, investments and dividends, or foreign income.

Certain Covid-19 grant or support payments may also need to be reported on a tax return.

It should be noted that people can choose to complete a tax declaration to benefit from certain income tax reductions or prove that they are self-employed in order to benefit from an exempt child care or maternity allowance. tax, for example.

For those on child benefit, if their income or their partner’s income was over £50,000 in the 2021/22 tax year, they may have to send in a return and pay the child benefit charge. allowance for high-income children.

The information you need to have on hand

Unique tax reference

National insurance number

P60 and P45

Interest statements

Your total income and any income from property, investments and stocks

Details of your business expenses if you are self-employed

Any contributions to charity or your pension

Can I still register for the self-assessment?

The deadline for filing a paper tax return was October 31 last year, which means those who have not yet filed their self-assessment must do so online.

Those not yet registered with HMRC for the first time will not meet the deadline. In fact, they should have registered before October 5 of last year.

HMRC will need to send them a unique taxpayer reference number by post, which is needed to create a Government Gateway account. This is followed by another letter with an activation code.

Those already registered with HMRC can file until midnight on January 31.

However, for many this may take longer than they think, especially if they are reporting untaxed income from multiple sources.

For those aiming to complete it before tomorrow’s deadline, it would therefore be unwise to leave it until the last hour.

“Collecting documents takes longer than you think,” Shah says. “If you are employed, this includes your P60 which will confirm the total tax you have paid on your income.

“You will also need a Statement of Benefits and Expenses which can be found on your P11D or P9D forms.

“If you left a job in the last tax year, you will also need a P45 from your former employer.”

More than 12 million customers are expected to file taxes for the 2021 to 2022 tax year

More than 12 million customers are expected to file taxes for the 2021 to 2022 tax year

How you could reduce the tax you owe

1) Apply for a tax reduction on pension contributions

Those who pay personal pension contributions are entitled to relief at their marginal tax rate.

People can usually pay up to £40,000 for their pension each year and qualify for tax relief unless they have reached their lifetime allowance of £1,073,100.

If they pay contributions directly to a personal pension rather than through a company scheme or wage sacrifice, they will get basic tax relief at source – but they have to claim the 20 or 25 additional % on their tax return.

2) Maximize your charitable donations

For those who have made a donation to a charitable association and signed the declaration of aid for the donation, the State completes the donation by granting the association the reduction at the basic rate due.

However, higher and additional rate taxpayers may also claim the difference between their highest tax rate (40% or 45%) and the base rate of 20% on the total value of a donation made.

3) Apply for family allowances

Once someone starts earning £50,000 a year child benefit starts to be withdrawn. This benefit pays £1,133 per year for a first child and £751 for each additional child.

People get no child benefit once a household’s highest income earner hits £60,000.

If a person’s income is between £50,000 and £60,000, the tax burden is less than the full Child Benefit amount and increases gradually to 100% when income reaches £60,000 and above.

Income includes taxable benefits received from employment, such as a company car or medical insurance.

If a person has already paid the load but their income has dropped during the year, for example due to vacation, they may have paid too much tax on their pay and it would be useful to check if she is entitled to a refund.

4) Work from home or hybrid work

Those who regularly worked from home in 2021/22 can claim £6 a week as a tax deduction for additional costs such as heating and lighting.

If they haven’t claimed it during the year through their PAYE tax code, they can claim it through a tax return.

5) Keep records

Remember to make a copy of the completed tax return and keep a copy for your records.

If someone is employed or retired, they will need to keep all records for 22 months from the end of the tax year to which they relate.

If they are self-employed or renting a property, they must keep all documents for five years and 10 months.

How do you know if you need to file a tax return?

1) You are self-employed or a sole trader and have earned at least £1000 in income in the last tax year

2) You are a partner in a partnership business

3) You are a director of a public limited company

4) You have earned tips or commissions equivalent to £1,000 or more

5) You have property income

6) You have income from foreign sources

7) You have income from savings, investments or dividends

8) You need to claim tax relief, for example on pension contributions

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