Ask anyone with a birthday in January, they’ll tell you that no one ever comes to their birthday party. It’s cold, it’s dark and everyone is skint!
If that was not enough, imagine you had a self-assessment tax liability due by 31 January every year. This would usually happen after you file your tax return and realise how much tax money you owe HMRC.
Even if you have a tax liability bill to pay, it doesn’t have to be this grim. We might not be able to do much about the weather, but tax liabilities can be prolonged so they aren’t due so soon after Christmas.
Provided that your tax return is submitted online to HMRC by 30 December 2021, and you make the appropriate claim, your liability can be deducted through your tax code over the course of the next tax year rather than paying it as a lump sum in January. If you want to take this option, make sure to select (tick) it when doing your tax return.
What are the advantages of spreading the cost?:
Not everyone is eligible to make this claim, but you certainly cannot if you do not submit your tax return by 30 December 2021. You will not have this option if you aim towards 31 January 2022 as the deadline day for your tax return submission.
There is other complicated criteria, but the main requirements are:
Tax planning can not often be done after the end of the tax year. Therefore, always plan ahead and think about your tax implications in advance, before you submit your tax returns.