…Tax Returns Advice
In this blog we will try to give you the best possible generic advice for preparing your 2019 tax returns.
This is aimed at making it easier and more straightforward for you to complete your 2019 tax return.
If you use HMRC’s online services to file your tax returns, you need three key pieces of information by your side before you can do anything.
You will need:
- Your Tax Reference (UTR)
- User ID code
If you can’t find these details, you can either get in touch with HMRC or contact us and we’ll help as far as possible.
WHICH DETAILS ARE YOU DECLARING?
Once you have all of the relevant log-in details, you’ll need to consider the information that’s required to actually complete your return.
Reminder – your tax return isn’t just about declaring details of all of the taxable income you’ve received.
This is when you’ll need to refer to the annual statement from your foster care service provider and details of the placements you’ve had throughout the year.
IS A PARTNERSHIP VIABLE?
Don’t forget to consider your entitlement to allowances for enhanced expenses.
You may also want to think about possible setting up a partnership to reduce your tax liability.
We assist many Foster Carers with their tax returns and business accounting—it is not always as easy as it sounds.
WHAT DO YOU DO AFTER COMPLETING THE FOSTERING ELEMENT OF YOUR TAX RETURN?
You need to consider your other taxable income and enter it on your return. The most common sources of ‘other income’ we come across are:
Your employer should have provided you with a P60 by 31st May 2019. You’ll need to complete the employment section of the return (If you left your employer during the tax year, you should have a P45).
This may be the state pension, in which case you’ll have been notified by HMRC about the amount you’ve paid. If you have a private pension, then your pension provider will be able to provide you with a P60.
Most banks now supply details of earnings online.
If you own shares, the company will issue a dividend voucher when they pay you a dividend.Income from Property
If you own a rental property, you’ll need to declare the rental profit each year. The rental profit is the income less the allowable rental expenses relating to the property. The issues surrounding allowable expenses can be confusing, so please call us if things aren’t clear.
Please remember that certain benefits are taxable and should be entered on your tax return. For example, carer allowance.
You will need to consider all other income, such as PPI refunds or pension lump sums, you may have received in the year. Remember – HMRC may ask to see all of your bank statement etc., to make sure you’ve correctly accounted for all of your taxable income.
It’s your responsibility to submit complete and accurate tax returns. Incomplete or inaccurate submissions can be penalised by HMRC, with penalties starting at 30% of the tax due and rising to 100%.
THE IMPACT OF THE DIGITAL ERA ON YOUR RETURNS
The introduction of digitalisation across government departments means it’s much easier for HMRC to check the accura-cy of return. Employment and pensions income, including lump sum payments, are automatically reported to HMRV when you’re paid.
REAL TIME REPORTING
Referred to as Real Tim Reporting (RTI), the development means that HMRC have independent confirmation of the fig-ures that should be on your tax return. They also have easier access to Land Registry records, which report all property sales in the UK. If you sell a rental property and don’t declare the income from it to HMRC, they’ll most probably be in touch with you at some point.
Submitting an inaccurate tax return can be worrying and expensing exercise. One way you can minimise the risk of er-rors by using our tax return service, which we charge a flat fee for, so there are no hidden extra charges.
You may already be experiencing issues with HMRC in relation to previous tax returns. Our team of tax advisers can help. You can reach us on 01473 558866 or email firstname.lastname@example.org.