LITRG summarises some key tax and tax credits deadlines for July.
Introduction
The 22 June Budget has brought into sharp focus the hard times that are upon us. It is therefore more vital than ever to make sure that you check your tax, tax credits and benefits to make sure you are getting the paperwork right, dealt with on time and not missing out on any entitlements.
Here we provide the latest in our series of monthly reminder articles to help you on your way.
Tax – Self Assessment returns and tax payments
Still need to send in your 2008/09 tax return? Act quickly
If you haven’t yet submitted your Self Assessment tax return for the year to 5 April 2009, you will probably have already received a penalty notice earlier this year, as the final deadline was 31 January 2010. But if you still haven’t submitted the return by 31 July, you will receive another £100 penalty notice, so it’s important to send it in as soon as possible.
Do you need to pay tax by 31 July?
If you are in Self Assessment (that is, you send in a tax return each year), then you might have tax to pay on 31 July. It depends on how much you owed for 2008/09 and whether or not most of your tax is collected through PAYE.
The tax payment due on 31 July is the second payment on account for 2009/10 (the first payment on account was due on 31 January). You can claim to reduce your payments if you think you will owe less for 2009/10 than for the previous year (for example, if your income has gone down) – for further guidance, see the useful links section below.
Having difficulty paying your tax?
If you are having trouble making tax payments, contact HMRC as early as possible to discuss your situation. They might agree to let you have more time to pay, although you will still be charged interest on any amount not paid by the due date.
In any event, if you have not yet paid the tax that was due on 31 January 2010, you should do so as soon as possible to avoid paying any more interest or late payment charges.
Get ahead with your 2009/10 tax return
It might feel like you’ve only just dealt with last year’s tax return, but it’s worth sorting out your 2009/10 return sooner rather than later. Remember that if you are planning to send in a paper return, you only have until 31 October 2010 to do so; online returns have a later deadline – 31 January 2011.
The sooner you send in your tax return, the sooner you will know how much you owe and can budget for your tax payments; or, if you are due a repayment, you will get your money back sooner.
Do you want to try submitting your tax return online for the first time?
If you haven’t filed online before but want to do so this year, have a look at HMRC’s guide to filing online. You will first need to register for the service and wait to be sent a user ID and password – as this can take about a week, make sure you do it in advance and don’t leave it until near the 31 January deadline.
Do you need a tax return but haven’t received one?
Remember, if you haven’t received a Self Assessment tax return or notice to complete one, but you think you might have tax to pay for 2009/10 (for example, if you started to have a new source of income in the year such as becoming self employed), you must tell HMRC. The deadline for telling them is 5 October 2010. Telephone the Self Assessment helpline on 0845 900 0444. And don’t forget to keep a careful note of any calls made to HMRC.
Failing to notify HMRC of a new liability to tax can trigger a penalty. HMRC have produced some frequently asked questions on the new penalty regime from 6 April 2010 and a Factsheet.
Pay As You Earn (PAYE)
Is your tax code correct?
Experience from TaxHelp for Older People suggests that the problems HMRC were experiencing earlier in the year issuing incorrect PAYE codes to employees and pensioners are still working their way through the system. It’s worth therefore double-checking that your codes are correct, as there could still be a problem which has not yet come to your attention.
Employers and employees – remember the deadline for P11Ds and P9Ds
If you employ staff and provide them with certain benefits in kind or reimburse expenses, you might need to complete forms P11D or P9D by 6 July and submit them to HMRC and hand out copies to employees. Likewise, employees should expect to receive these forms from their employer, if applicable.
With regard to benefits, employers will also need to pay any additional Class 1A NICs by the deadline (19 July for cheque payments, 22 July for approved electronic payments).
Employers – quarterly PAYE
If you are an employer whose total tax and NI payment will be on average less than £1,500 a month, you can choose to pay quarterly, rather than monthly. If you have opted for this you must make sure your cheque arrives with HMRC by 19 July or, if paying electronically, cleared payment must have reached HMRC’s account by 22nd July.
Claiming tax credits?
Complete your ‘renewal’ by 31 July 2010 at the latest
A key date for tax credits, 31 July, is now nearly upon us. This is the date for tax credits renewals, which means finalising your 2009/10 tax credits claim and renewing your claim for 2010/11. Don’t leave it until the last minute, however. The tax credits section in an earlier article on the LITRG website explains why.
Remember to report changes of circumstances promptly
In that same article, we also reminded about reporting changes in circumstances outside of the renewals process and urged those who do not currently claim tax credits to keep an eye on their situation in case they need to make a protective claim or are now eligible to claim.
What if HMRC will not send you a form because they say you are not entitled?
Note that when you telephone the tax credits helpline to request a claim form, you will have to answer a number of security and personal questions. From your answers, you might be told that you are not currently eligible to claim, but you can still insist that HMRC send you a claim form. Even if your income is too high to receive any tax credits at the moment, you can still make a claim and be given a nil award. Some people do this to guard against their income dropping during the tax year, which is why this kind of claim is often referred to as a ‘protective claim’. The helpline number is 0845 300 3900 (textphone 0845 300 3909).
How to stop receiving tax credits
Once in the tax credit system, it is notoriously difficult to get out again without incurring an overpayment. Some people decide that they no longer wish to claim tax credits, and often don’t complete their ‘renewal’ forms as they don’t wish to claim. One of the problems with this is that any payments made since April become overpaid.
In April 2010, HMRC introduced new rules that allow claimants to withdraw from the system by finalising their claim for the year just ended without the need to make a new claim for the current tax year. However, the details of how this works in practice are not yet known. We urge anyone who wishes to withdraw from the system to seek advice (for example from an advice agency such as Citizens advice or local authority welfare rights). Withdrawing now is likely to mean that there will an overpayment of tax credits since April which HMRC will demand be repaid.
Check your entitlement to childcare credits during the summer holidays
With the school holidays approaching, childcare costs are a concern for many parents. We will shortly be posting a separate article covering the tax credits issues to consider.
And finally… the Saving Gateway is no more
In previous articles, we mentioned the Saving Gateway – a scheme designed for certain benefits claimants to save over a fixed period and receive an extra subsidy from the government. This was due to be rolled out from July this year, but the plan was axed in the 22 June Budget.
Useful links
Emergency Budget – the low-income summary
LITRG guidance on self assessment payments on account
HMRC guidance if you can’t pay your tax
Guidance on negotiating time to pay with HMRC on the TaxAid website
Telephoning HMRC? Keep a careful note
Tax code errors – check yours now
HMRC’s monthly reminder diary for employers
Find a Citizens Advice Bureau near you
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