Stress-Free Tax Returns

The self assessment deadline is 31 January for online filing, and it is also the payment deadline for the balance of the previous year plus, for most people, the first payment on account for the current one. Those three obligations landing on the same day is why January is difficult, and why we aim to have returns prepared months earlier. Knowing the number in September and paying it in January is a completely different experience from discovering it a week beforehand.

The penalties escalate in a way that surprises people. A fixed penalty applies the day the return is late, whether or not any tax is owed. Daily penalties follow after three months, and further charges at six and twelve months, with interest running on unpaid tax throughout. A return that is a year late can cost well over a thousand pounds in penalties on a nil liability. There is no advantage in delay and considerable cost.

Payments on account are the most misunderstood part of the system. Once your liability passes the threshold, HMRC collects the next year's tax in two instalments in January and July, on top of the balancing payment. The first January after a strong year therefore brings a demand around one and a half times the size of the bill you were expecting. Where income has genuinely fallen, the payments can be reduced — but reducing them below what turns out to be due attracts interest, so it is a judgement rather than a lever to pull automatically.

You need to file for more reasons than being self-employed: rental income, dividends and savings above the allowances, capital gains, income over the threshold at which the personal allowance tapers, the high income child benefit charge, foreign income, and being a company director where HMRC has issued a notice. People often discover an obligation years after it started, which is a considerably more expensive way to find out.

The high income child benefit charge deserves particular mention because it catches households who have never had to file before. Once the higher earner's adjusted net income passes the threshold, some or all of the child benefit is clawed back through self assessment. Pension contributions reduce adjusted net income and can remove the charge entirely, which is the kind of thing worth knowing before the year ends rather than after.

If returns are already outstanding, the position is better than it feels. HMRC treats a voluntary approach very differently from one prompted by their own enquiry, and penalties can often be reduced where there is a reasonable explanation. We work out what is owed, file what is missing, and where the money is not there we arrange time to pay. Leaving it is the only approach that reliably makes it worse.

The fee is fixed and agreed before we start, based on what your return actually involves. It covers the return, the tax calculation, telling you what to pay and when, and the questions you have along the way.