Why Filing Your Tax Returns is the Best Christmas Present (and the One That Saves Money)
Even though the official Self Assessment deadline falls on 31 January, folks across the UK are turning the holidays into a great excuse to get their paperwork done. It’s the season to get things sorted, so why not light up your laptop instead of the tree?
Last Year’s Holiday Rush
During the 2023 festive period, a staggering 25,769 taxpayers signed up for Self Assessment online. That includes 8,876 people who submitted on Christmas Eve and 4,757 who filed on Christmas Day. Turns out, no one’s afraid to replace a Christmas cracker with a tax form!
Missing the 31 January Date? Big Trouble Ahead
HMRC’s policy on late filings is simple: fail to meet the 31 January deadline and you’ll be hit with an automatic £100 penalty. If you keep holding off for more than three months, the penalties grow like a snowball—interest accrues and the fine jumps much higher. That’s a recipe for a dreadful New Year rush.
Small‑Business Owners: Don’t Let Taxes Weigh on Your Holiday Spirit
Emily Coltman FCA, Chief Accountant at FreeAgent, warns that 14 % of SMEs feel their future bleakly and may even shut down. So, it’s crucial that small businesses stay ahead of the game—file on time, pay what’s due, and sidestep that £100 fine that can feel like a kicked wreath.
“The last thing you want in these tough times is an automatic penalty, but it’s vital you pay on time,” Coltman said. “If you let it drag on, those fines can spin out like a snowman that never melts.”
FreeAgent’s Handy Quick‑Start Checklist
To keep the holiday spirit, FreeAgent gives a few friendly pointers for getting your Self Assessment done fast and easy. For example:
- Collect all receipts and invoices—you can’t claim what you don’t have evidence for.
- Use the online portal—live neatly from the same platform you use for bookkeeping.
- Set a calendar reminder well before the deadline—think of it as a digital Christmas card telling you “Don’t forget!”
- Organize expenses by category—makes the final tally simpler and gives a clearer business picture.
- Double‑check your calculations—one typo can cost you a heftier fine.
Finish your return ahead of schedule, and you’ll spend the holidays knowing you’ve not only helped your business—but also saved yourself from that extra cost. Happy filing, and happier holidays!
Assemble all your paperwork first
Getting Your Tax Return Done in Small, Manageable Steps
Think of the tax return like a giant pizza – you don’t want to gobble it all at once. If you tackle it one bite at a time, you’ll avoid that dreaded “exhaustion” feeling.
Step 1: Gather Your Paperwork
Before you even pencil in that first answer, assemble everything you’ll need. This is the foundation of a smooth return.
- P60 & P11D from your employer – proof of all the income you’ve earned.
- Bank interest certificates – the official record that your money made rent.
- Pension income certificates – evidence of the money you’re receiving from your retirement plans.
- Gift Aid donation details – records of any charitable giving that could boost your refund.
With these documents in hand, the rest of the form will feel like a walk in the park.
Make sure you’ve got the right year
Grab Your Paperwork Before the 5th April Deadline
Heads up! The 2023/24 tax year wrapped up on 5th April 2024. Make sure the documents you hand in line up with that date. If you pick a P60 that reflects a previous year’s salary, you’re courting a tax mismatch—your tax bill could shift even if your earnings stayed the same.
Self‑Employers: Read This
- Profit is the key. Your tax return hinges on the profit your business has made, not revenue or cash flow.
- Keep a tidy record of all income and day‑to‑day expenses for the tax year ending in April.
Auto‑federal Basis Period Reform (2023/24)
Walking around without finalising accounts to 31st March, 5th April, or any date in between? There’s a second cake layer you’ll have to bake: report both the full accounting year and the same figures again up to 5th April 2024. It’s the way the tax gears are shifting this transition year.
Why This Matters
Missing these steps can turn a simple tax file into a rollercoaster of re‑filings. Stick to the dates, we promise it’s easier than dealing with a spreadsheet that’s gone rogue.
What’s the right amount of bank interest?
How to Handle Bank Interest on Your Tax Return
When the tax year ends on 5th April 2024, you’ll need to report the total interest your bank owes you. Here are the quick rules you should follow:
1. Personal Accounts
- If you own a joint account with your partner or spouse, you only report your share of the interest.
- Remember: the total amount that the bank paid you for that year – not the raw number from the statement – is what goes on the return.
2. Business Accounts
- For sole traders and partnerships, any interest the bank pays can be declared on your individual Tax Return.
- However, if your business is a limited company, then the interest belongs on the company’s own Tax Return – not on your personal one.
3. ISAs (Individual Savings Accounts)
Got an ISA? Good news: No need to add the interest earned to your Tax Return at all. Those earnings stay fully tax‑free.
Tip & Tone
Think of the interest you’re reporting as the tip your bank leaves you for holding their money. It’s a small thank‑you that must be declared, but if you’ve got an ISA, the bank’s thanks already come without a tax tag.
Marriage Allowance: to give or to receive?
Marriage Allowance Made Easy
Hey folks, did you know that most taxpayers can keep a chunk of their earnings tax‑free? It’s all about that trusty Personal Allowance – currently £12,570. If your paycheck tops this, you’re not a non‑taxpayer.
What happens if your earnings are below the threshold?
If you’re below the £12,570 mark, you’re a non‑taxpayer. That means NO tax, or just the tiniest bit for the next lowest rate.
Enter the Marriage Allowance – your tax‑saving secret weapon
Imagine you’re paying the basic 20% or Scotland’s 21% rate, and your spouse or partner is a non‑taxpayer. In that case, they can shift some of their Personal Allowance over to you, giving you a tax break.
Heads‑up: the rules are one‑way streets. You can receive the allowance if you’re in the low‑rate bracket, but only the non‑taxpayer can transfer it.
- Check your tax bracket first.
- Make sure you’re not paying at a higher rate.
- Talk to your partner about whether they’re eligible to transfer.
- Fill your tax return correctly – a tiny switch can keep your money where it belongs.
So, let’s keep more of that hard‑earned cash in your pocket. Trust me, tax‑saving tips are best when shared over a cuppa!
Don’t wait till the last minute
Why Delaying Your Tax Return Is a Bad Idea
Putting off filing that tax return until the end of January is a tempting shortcut—especially when you’re juggling emails, grocery lists, and that nagging “I have to do something” feeling. But trust us, it’s a recipe for headaches.
The Mistake-Maker Shortcut
When you wait until the last minute, the rush can lead to mistakes that others might spot but you could miss. Even a tiny typo in your name or a wrong figure in your income can trigger a delay or a demand for extra paperwork from HMRC.
The Online Log Jam
HMRC’s online filing portal doesn’t magically come easier as the deadline approaches. In fact, it can get pretty jammed—lots of other taxpayers are all trying to get their stuff in at the same time, causing lags or incomplete uploads.
Think About It
- Fewer Errors: The more time you give yourself, the easier it is to double‑check everything.
- Smoother Online Experience: Filing early means fewer bottlenecks.
- Peace of Mind: There’s no last‑minute scramble; you can relax a bit.
Bottom line: If you can, get those forms in well before the deadline. It saves you stress, saves your money (by avoiding late‑payment penalties), and keeps your tax season as smooth as possible. So put the tax return on your to‑do list early and give yourself a hefty break later.
