1107 Focus Spring 2020 Print - Page 19

submission of
accounts can
pay dividends
by Jed Eatough
lsgk accountants ltd
It’s difficult for many people to even think about
submitting your tax return whilst the 31 January
deadline so fresh in the memory.
However, doing so could have favourable
implications on your tax liability for forthcoming
payments including the payment on account at the
end of July.
Take the example of a business which has had a
better year than the previous and therefore is hit
with a large bill on 31 January, and a payment on
account on 31 July based on a similar forecast for
the current tax year. When that business knows that
the profit for the current tax year will be lower it is
prudent to file a tax return as soon as possible to
allow for an adjustment of the payment on account
on 31 July.
In another hypothetical scenario there is a client
currently being assessed by HMRC as a higher
rate taxpayer. In this case his wife doesn’t work
and by talking to him now about using available
allowances, we can facilitate the transferring some
of her personal allowance and doing some income
shifting. In doing so the client can radically reduce
his tax bill. In addition, by submitting his tax return
in early April he can get his tax code amended and
reduce his payment on account.
Cash is the life blood of any business, no matter
what size, and the scenarios above are just two
cases which present favourable implications.
So many people lose sight that their tax return is
due for submission from 6 April and that 31 January
is the last day deadline.
Finally, an additional benefit is that by being
proactive in April, you will catch your accountant
in a far more relaxed mood, and with more time
available to look at your case than you would in
December or January.


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