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January Tax Accountant
Are you self employed, have investment income or rent out a property?
If so, you have until 31st January 2021 to file your tax return and pay your tax liabilities on any income received between 6th April 2019 and 5th April 2020.
What Information Does My Accountant Need for My Personal Tax Return?
At Edwards Bailey Chartered Accountants, we are frequently asked what documents are needed to complete year end accounts and tax returns.
If you have manual accounting records, such as paper invoices and receipts, we will need:
Copies of bank statements which include any business income and expenditure between 6th April 2019 and 5th April 2020.
Credit Card Statements
Copies of credit card statements which include any business expenditure between 6th April 2019 and 5th April 2020.
Copies of all sales invoices raised to customers between 6th April 2019 and 5th April 2020. If you are registered under the Construction Industry Scheme (CIS) we will also need your monthly or annual CIS statements.
Copies of all purchase invoices received between 6th April 2019 and 5th April 2020. This can be any expenses that that you incurred in the normal course of business.
If you received any dividends or bank interest between 6th April 2019 and 5th April 2020 we will need copies of dividend vouchers and interest summaries from your bank.
If you use accounting software to maintain your financial records, such as QuickBooks or Xero, we will need:
- Access to your accounting software
- Your bank reconciled in the software
- Your credit card statements reconciled in the software
- Purchase invoices
- Payroll records
Income Tax Rates 2020
Your tax free personal allowance for the 2019/2020 tax year is £12,500, unless you earn over £100,000 a year.
The income tax rates for 2020 are as follows:
Income Tax Rates
20% up to £50,000 of total income
40% on total income between £50,001 and £150,000
45% if your total income is over £150,000
Dividend Tax Rates
0% on your first £2,000 of dividends received
7.5% up to £50,000 of total income
32.5% on total income between £50,001 and £150,000
38.1% if your total income is over £150,000
How Do I Pay My Income Tax?
You can pay your income tax in several ways:
- Direct Debit
- Bank Transfer
- Online by credit or debit card
HMRC payment details can be found on https://www.gov.uk/pay-self-assessment-tax-bill
When Should I Pay My Personal Tax?
The deadline for paying any outstanding personal tax liabilities is 31st January 2021 for the 2019/2020 tax year, however your tax liability can be paid at any time prior to this date.
If your tax liability is greater than £1,000 for the 2019/2020 tax year you will also be require to make payments on account towards the 2020/2021 tax year, which are due by 31st January 2021 and 31st July 2021.
These payments on account are equal to 50% of your 2019/2020 tax liability.
What Happens if I Cannot File My Tax Return on Time?
If you do not file your self assessment tax return by 31st January 2021 for the 2019/2020 tax year you will incur a late filing penalty of £100.
If your tax return is over 3 months late you will incur additional penalties of £10 a day up to 90 days.
If your return is over 6 months late you will incur an additional penalty of 5% of your tax liability or £300, which ever is greater.
What Happens If I Cannot Pay My Income Tax on Time?
If you cannot pay your income tax on time you will incur interest of 2.6% a year on any outstanding tax liabilities.
You can arrange a payment plan with HMRC to clear the tax liability over time, however interest will still be incurred and there is no guarantee that HMRC will agree to a payment plan.
Need Assistance With Your Tax Return?
It’s not too late to complete your personal tax return before the deadline of 31st January 2021 and avoid late filing penalties and interest.
If you would like assistance with your tax return, please contact Edwards Bailey Chartered Accountants today for a free consultation on 01708 200675 or by email at firstname.lastname@example.org
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