HMRC aren’t recognized for his or her Christmas spirit, however there’s one space the place some taxpayers can profit from somewhat cashflow bonus in the event that they act now.
Stefanie Tremain, from eading tax and advisory agency Blick Rothenberg, mentioned: “Most individuals are conscious that the traditional submitting deadline for a Self-Evaluation tax return (and to make any funds due) is 31 January, which implies 2022/23 tax returns and tax funds are due by 31 January 2024.
“What is less well known is that if your tax liability is less than £3,000 and you have a source of PAYE income (e.g., employment or private pension income), and your tax return is filed by 30 December, your tax can be collected through your PAYE code in the following tax year.”
She added: “For example, if you owed tax of £2,500 for 2022/23, you would either need to pay this in full by 31 January 2024, or HMRC could take a deduction from your pay in 12 instalments, starting in April 2024. This can be a huge boost to cashflow at what is already an expensive time of year.”
Stefanie mentioned: “Taxpayers need to make sure that they have enough PAYE income in the relevant year to collect the additional tax, and make sure they would not end up paying more than half of their income in tax.”
She added: “For any taxpayers filing their own tax returns who would like to take advantage of this, HMRC should do this automatically when they process your return, provided you leave the relevant box unticked.”
She added: “It’s also important that taxpayers remember whether any tax was 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 you they otherwise mistakenly think they are due a refund!”
