Business owners should use the Christmas break to get up to date with their tax and finances, say the team at Optimum Professional Services.
With the self-assessment deadline on the horizon, Mandy Gibson, tax supervisor at the West Swindon-based accountancy and law firm, said the Christmas lull should give people a chance to do some financial housekeeping.
“The deadline for online tax returns to be filed, for the tax year 2017/18, is midnight on January 31st and it’s already too late to file a paper version,” said Mandy. “Any submitted later incur an automatic £100 penalty, even if there is no tax to pay or any tax due has been paid. And there are additional penalties the longer the delay.”
Mandy added that the festive break could also be an opportunity to look at how to make the most of tax-free allowances.
The annual ISA savings allowance is £20,000, and this must be topped up by the end of the financial year in April.
Tax relief available for pensions for 2018/19 is £40,000, and the deadline for topping this up to the maximum is also the end of the financial year. More can potentially be paid in tax free, by carrying forward unused allowance from up to three previous years.
Mandy added: “Making as much use as possible of the tax allowances available really does make sense. Careful tax planning can help reduce people’s tax burden leaving more in their savings or pension pots and less going to HMRC.”
Optimum Professional Services offers accountancy and legal services under one roof. As well as tax planning, the accountancy team offer business development, bookkeeping and payroll. The legal team specialise in conveyancing, wills and probate.