Don’t Overpay On Your Personal Tax – Getting Ahead of Your Returns

With the second payment on account deadline of July 31st fast approaching, UK personal taxpayers should be aware of the potential impact of income fluctuations on their tax liability.

Taxpayers who have experienced a decrease in income during the 2022/2023 tax year compared to 2021/2022 are at risk of overpaying on their second instalment. To avoid this overpayment, it’s worth completing another personal tax return. By completing a tax return, you can ensure that your payments accurately reflect your current income levels, not taxing you based on last year’s calculations.

Getting Ahead of Your Returns

When it comes to taxes, the sooner you start preparing your return, the better. This is especially important when income levels have fluctuated drastically since last year’s tax filing period. With this year’s economic impacts, many people may find themselves in this situation.

When filing a personal tax return due to reduced income, three key steps must be taken:

1. Gather all your relevant financial documents and income statements.
2. Research any allowances you may be eligible for, such as the Marriage Allowance 
3. File your personal tax return with HMRC as soon as possible to ensure that your payments are accurately calculated based on your current circumstances.

These steps apply whether your income has gone down or not, but it’s especially important for those that are in this situation and want to avoid overpaying.

The Benefits of a timely filing of your Return

Filing a timely tax return can help you save in a few significant ways:

1. You will have an accurate calculation of your tax liability.
2. You may be eligible to receive a refund or rebate on taxes already paid.
3. You can avoid any penalties and interest that would apply if you miss the payment deadline.

It’s also worth noting that filing a return before July 31st will allow HMRC sufficient time to process your return and make the necessary adjustments to your payments on account.

The takeaway here is that if you expect your income to be lower this year compared to last year, it’s worth filing a return before the second payment on account deadline of July 31st. 

If you need a hand in making sense of the tax return process and learning about the allowances you may be eligible for, consult a local expert.

Contact The MGroup to be confident your personal tax affairs are in order.