So What's All The Fuss About?
By Carl Bayley BSc ACA
The Inland Revenue is currently pouring a great deal of the money that they have collected from the rest of us into an advertising campaign to promote awareness of the 30th September "deadline".
So what is this deadline then?
Well, first of all, let me put everyone's mind at rest by confirming that there are no penalties, surcharges or interest involved. No-one will be penalised in any way if their tax return fails to reach the Inland Revenue by 30th September.
No, it's not that kind of deadline. That deadline is 31st January next year.
There are, however, two things which the Inland Revenue will undertake to do if your tax return reaches them by 30th September. In my opinion, one of these is potentially quite important, although admittedly only to taxpayers who meet certain criteria. The other, in my view, is pretty meaningless.
The thing which Revenue is promoting so heavily is that they will work out your tax for you if your tax return reaches them by 30th September.
Well, let me let you into a little secret folks. The Revenue will always work out how much tax they think you owe them, regardless of when you send in your tax return!
What they say about this so-called deadline, however, is that they will only guarantee to work out your tax liability in good time for you to know how much you are due to pay by 31st January if your return reaches them by 30th September.
In reality, you will generally tend to get a tax calculation from the Revenue within about six weeks of the date you submit your tax return. Hence, most taxpayers who submit their returns by the end of November will get confirmation of the amount due in good time to arrange their payment.
But do you really want to leave it to the Inland Revenue to tell you how much you have to pay? Have you any idea how many times they get it wrong? Most people that I come across prefer to work their tax out for themselves or get a professional to do it.
After all, if your tax affairs are complex, you will probably be using an accountant and he or she will work out your tax, whereas, if your tax affairs are simple, well, then, it should be simple anyway!
The other aspect of the 30th September deadline, however, is potentially of enormous benefit to certain taxpayers, namely those in employment and those receiving private pensions (i.e. non-state pensions).
This is because, if your self assessment tax liability for the year is no more than £2,000, and your tax return reaches the taxman by 30th September, you may apply to have your tax collected during the 2005/2006 tax year through your PAYE code.
This represents a significant potential cashflow saving and that's a benefit certainly worth making a fuss about!
