05 April 2022
It may feel like you have just done a tax return; however, reviewing your income and gains for the year to 5 April 2022 may be beneficial. You may find that you do not need to complete a tax return anymore and so can request that HMRC removes you from Self Assessment tax return. Alternatively, it may be possible for you to reduce your payments on account thereby leaving you with less to pay in July 2022. Better yet, you could get ahead and start preparing your actual tax return for 2021/22, either by collecting all the information now or even submitting it if you already have all the information. If you use an agent to complete your tax return, they would very much welcome receiving the information at this time of year!
For various reasons, income levels may have fluctuated over the last few years and so if you have or intend to make gifts out of income to friends or family members, then now would be a good time to assess your income and determine if such gifts can be made. Where relief applies, such gifts can be free from inheritance tax. Similarly, if you make payments on account and your tax liability for the year to 5 April 2022 is lower than the year before, you could prepare and submit your tax return early to reduce the payment due in July 2022.
If you are an employee or director, you will have been notified previously of your 2022/23 PAYE tax code and so it's worth a quick check of this to make sure that it is in fact correct, so the right amount of tax will be deducted each month. Leaving this to later in the year could mean an unexpected increase in tax deduced later in the year and not looking at it all could result in you needing to complete a Self Assessment tax return.
As part of this, you should ask yourself the following questions
- Do you agree with any amounts of unpaid tax that are included?
- Are you entitled to a personal allowance, and has this been correctly included or excluded?
- If investment income is included, do you agree with the amount that's been taken into account?
You can also consider the level of pension contributions that you would like to make for the year using the current year allowance and any unused allowances from previous years. Although you have the full year to make the contributions, by considering the amount now means they can be spread out across the year rather than having a rush to make a lump sum contribution at the end of the tax year.
HMRC states on its website that where a tax return has been submitted on or before the relevant deadline, the accompanying records need to be kept by the taxpayer for at least 22 months after the end of the tax year. Therefore, papers relating to the 2019/20 tax return no longer need to be kept, but this depends on your circumstances, for example, if you submitted your tax return late or are self- employed.
So, why not have a full spring clean and shred those papers?