6^th April 2014: A New Tax Year

By the time you read this article, a new tax year will have started and so now is the time to think about how to ensure that your everyday personal tax affairs will run smoothly. Fortunately, this article will help you do that.

2014 Personal Tax Return forms

HMRC will be issuing 2014 Tax Return forms, or notices to complete them, in early April 2014. All such Tax Return forms need to reflect a complete record of income, outgoings and capital gains for year ended 5^th April 2014. The filing deadline dates are 31^st October 2014for paper filers, and 31^st January 2015 for electronic and internet filers. These deadlines also apply to Tax Returns for Partnerships and Trusts.

If you file your own Tax Return, and wish to do so electronically, please ensure that you are registered with HMRC and receive your User ID andactivation PIN to enable you to do this. You can find help on this at: www.hmrc.gov.ukand will need to do this in advance of the final filing date.

What you need to do

You will need to start gathering together your tax information at an early stage.

• Directors and Employees need to ensure they keep the forms P60 (pay and tax details from employment), and P11D (benefits and expenses) plus the Section 336 Expenses claim. Your employer is obliged to provide you with your P60 by 31/5/2014 and the P11D/S336 claim by 06/07/2014. If you left an employment during the year, and were not employed for the rest of the year, you will still have the formP45 your former employer will have provided you with, summarising your pay and tax at the date of leaving. Pensions and annuities amounts and tax deductions will also be summarised on forms P60.
• Self employed and rental accounts will need to be prepared to support the Tax Return at an early stage, so review your books and records to your preferred accounting date, and ensure that supporting invoices and receipts are available for your accountant to prepare your accounts.
• Dividend vouchers will have been sent to you by the companies during the tax year, and interest details will be available from your bank or building society, either via your regular statements, or online. Investment portfolio statements will be made available to you by the investment houses after the year-end, and should contain full details of all income, and assets bought and sold within the portfolio.
• If you receive Trust Income, this will be informed to you by the Trustees on a form R185, after the 5^th April.
• Contract notes in respect of assets bought and sold privately will have been provided by the broker during the tax year.
• Details of any tax deductible loan interest paid should be available in certificate form from your lender after the end of the tax year.
• Details of any charitable contributions made will need to be collated. You may make them via regular direct debits or standing orders, or one-off payments by cheque of cash, via the Gift Aid scheme. You should always preserve the Gift Aid certificates, especially in the case of cash payments.
• Details of pension contributions will be available from your pension provider, although possibly not on the fiscal year-end of 5^th April. Please ensure that you bear in mind any changes to contributions made after the provider’s year-end.

Advantages of filing ‘early’

Those who file the Personal 2014 Tax Return form before 31^st July 2014 will have the advantage of knowing their tax liability for 2013/14 well in advance of the due date for the 2013/14 balancing payment and the 2014/15 1^st interim Payment, of 31^st January 2015. If their total tax liability for 2013/14 turns out to be lower than the Interim Tax Payments set by reference to the 2012/13 tax liability, they will have the cash flow advantage of being able to make a postponement application to reduce their 2013/14 interim tax payments in time for the 2^nd interim tax payment on 31^st July 2014, and recover any overpayment of tax on the 1^st interim tax payment.

Notices of Coding

Directors and employeeswill already have started receiving notices of coding from HMRC for the year 2014/15. They will typically consist of Personal Allowances (£10,000.00 for 2014/15, unless your gross income exceeds £100,000.00, in which case the Personal Allowance reduces by £1 for every £2 over the limit) plus allowances such as qualifying loan interest, but less taxable benefits, small amounts of untaxed income, national insurance retirement pension and deductions representing underpayments of tax from previous tax years. HMRC have also begun to make deductions from coding allowances representing arrears of other debts, such as Class 2 National Insurance Contributions. Personal Allowances increase, subject to the income limit of £27,000.00, if you were born before 5^th April 1949 and again if born before 6^th April 1939.

Experience tells us that many coding notices are often based on out of date information and containexcessive deductions from allowances. A few moments checking the coding notice could save you a considerable over deduction of tax.

Student Loans

Do you still have an income-contingent student loan? Is the balance small enough to be paid off during the current tax year? You will still need to declare it on the 2014 Tax Return form, and if you overpay as a result of this, you will need to seek repayment from the Student Loans Company.