Are you paying the right amount of tax?

08 December, 2023 / professional-focus
 Samantha Turkingon  

If you file late, even by a day, you will be charged penalties, with interest also charged if your payment is late.

We always advise that returns are prepared as early as possible to allow for planning of tax liabilities, however if your return is currently still outstanding, here are a few areas to consider, to ensure you are paying the correct amount of tax.

Tax deductible expenses need to be wholly and exclusively for the trade. This includes the purchase of equipment, courses including any associated travel costs, and phone costs if used for business.

The deadline for filing your self-assessment tax return, 31 January 2024, is fast approaching

Gift aid payments

One area which is often forgotten about is claiming relief for any gift aid payments made. If you have given to charity, large donations to well-known causes, or even small donations to those fundraising around the practice, these can help reduce your tax bill. 

The donations are ‘grossed up’ to 120 per cent of their value and are added onto your tax basic rate band. As such they allow for more of your income and profits to be taxed at your lowest rates, especially useful for higher rate taxpayers.

Payments on account

For most associates, your tax returns will include payments on account towards your 2023/24 tax liability. As such, it is always advised to consider how the next tax year will compare to the income in
your current return.

This is particularly of concern if your future income levels will be reduced. This can be through a variety of reasons, including change of practice, travelling and maternity leave. In such instances, your payments on account can be reduced, helping your cashflow.

Your tax liability for 2023/24 will be estimated, using a combination of actual income for part of the year plus a reliable estimate for the remainder. It is recommended you seek professional advice for this. If your payments on account are reduced too much interest will be charged. 

If you would like further advice, please get in touch with Samantha Turkington.

E: / T: 01307 474274

Tags: EQ Accountants

Categories: Magazine / Professional Focus

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