30th December filing deadline

PAYE (Pay As You Earn) taxpayers anticipating additional tax demands from Her Majesty’s Revenue and Customs (HMRC) should file their returns online using the self-assessment system by 30th December to avoid using capital for lump sum payments.

According to Alan Ford, Client Partner at Vantis, the AIM listed Tax, Accountancy and Business Advisory firm; “Most employees pay their tax via PAYE. However, at the end of the tax year, these individuals can face additional demands from HMRC, for example, on bank income or investments taxed at their relevant rate but outside PAYE. This could mean that they have to dip into capital to cover the lump sum payment required”.

“However, filing online with HMRC before the 30th December can avoid this. HMRC will adjust an employee’s PAYE code for the next tax year and then collect any outstanding amounts up to £2,000 through PAYE deductions from the individual’s income over the following year. It’s worth taking some time to spread the payments rather than use existing capital. Amounts over £2,000 do have to be paid in full by 31st January.”

Visit: hmrc.gov.uk for further information.