HMRC aren’t known for their Christmas spirit, but there is one area where some taxpayers could benefit from a small cash flow bonus if they act now.
Stefanie Tremain, from tax and consultancy firm Blick Rothenberg, said: “Most people are aware that the normal deadline for filing a tax return (and for making any payments due) is January 31, which means the 2022/23 tax returns must be submitted. and tax payments are due no later than January 31, 2024.
“What is less known is that if your tax liability is less than £3,000 and you have a source of PAYE income (e.g. income from work or private pension), and your tax return is filed by December 30, your tax can are collected. via your PAYE code in the following tax year.”
She added: “For example, if you owe £2,500 in tax for 2022/2023, you must either pay this in full by January 31, 2024, or HMRC can take a deduction from your wages in 12 installments starting in April 2024. This can provide a huge boost to cash flow at an already expensive time of year.”
Stefanie said: “Taxpayers should ensure they have sufficient PAYE income in the relevant year to collect the additional tax, and ensure they do not end up paying more than half of their income in tax.”
She added: “For all taxpayers who file their own tax returns and want to benefit from this, HMRC should do this automatically when they process your return, provided you do not tick the relevant box.”
She added: “It is also important that taxpayers remember whether tax has been collected through their PAYE code when they file their tax return for the relevant year in the future (e.g. for 2024/25, in this example), as they would otherwise think wrongly. they should get their money back!”
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