1. Self-assessment tax return and compliance
Many taxpayers struggle to understand the complex tax returns and complete them correctly. Ongoing changes to tax legislation mean that taxpayers risk incurring more penalties through failing to complete their returns, on time or correctly.
Our comprehensive personal tax service is a natural complement to our private client service. As a firm of tax advisers, we’ll help you pay the right amount of tax each year.
We relieve you of the self-assessment burden and save you time, worry and money by handling this process for you.
We will do all the necessary computations, liaise with HMRC and submit your return.
We also offer advice on how you can minimise your tax liability while submitting your return. We can also offer you fee protection insurance to provide cover against HMRC tax investigations in making smarter financial decisions.
Most UK taxpayers are entitled to a tax-free personal allowance, which for 2021/22 is £12,570. However, if you have an annual income exceeding £100,000, you lose £1 of your personal allowance for every £2 of income above £100,000. The higher rate threshold at which tax is charged at 40% also falls in step with the personal allowance, meaning that not only are you taxed at 40% on the additional £2 of income, but you also pay an extra 40% on the £1 of personal allowance lost, resulting in the marginal rate of 60%! This continues up to £125,140 (£100,000 + (£12,570 x 2), at which point your entire personal allowance has been lost and the marginal income tax rate drops back to 40%.
When a property is held in joint names, the owners are taxed according to their beneficial ownership, and by default, this is set at 50:50 – irrespective of who owns which portion. However, an exception occurs when couples who are married or in a civil partnership jointly own a property.
If you live with a spouse or civil partner and have jointly held property, you can change the split of property income to your actual share of ownership. This is useful when one individual has a lower marginal tax rate, and therefore the overall tax paid by both parties is lower.
If, for example, there is an 80:20 ownership, you’ll need to provide evidence that your beneficial interests in the property are unequal (via a declaration or deed), and complete a Form 17 accordingly.
In summary, a Form 17 should be completed if you own a property in unequal shares and you wish to inform HMRC that you wish to be taxed on that basis.
The annual allowance is the maximum amount of pension savings you can have each tax year that benefit from tax relief. You are subject to a tax charge (the annual allowance charge) if your pension savings exceed your available annual allowance for a tax year. The standard annual pension allowance is currently £40,000 but can be lowered to £4,000 depending on your income levels.
Each year you personally can contribute up to 100% of your relevant UK earnings (a minimum of £3,600) into a pension or the annual allowance (whichever is lower) and receive tax relief.
If you have any questions or need further advice in this area, please get in touch and we will be happy to discuss further