You will pay a £100 fine if you miss the deadline, with further penalties the longer you delay.
Last year around 385,000 people submitted their tax return shortly before the midnight cut-off, according to HM Revenue & Customs (HMRC).
More than 10million Britons complete a self-assessment form each year and the deadline for paper returns passed on October 31.
Not everybody needs to act and, if you have not submitted a return in previous years, you can probably relax.
Happy returns Anita Monteith, technical tax manager at the Institute of Chartered Accountants in England & Wales (ICAEW), warned that delaying your tax return until the last minute can lead to mistakes and a possible fine if HMRC deem you have not taken enough care.
“Gather all your important documents before you start, together with a copy of your previous year’s return and always check for errors before submitting,” she said.The deadline for online self-assessment tax returns in 31 January
Monteith added that you must declare all your income and capital gains: “There are severe penalties for failing to declare all taxable income and capital gains.
“Gather details of any assets you have sold in the year, such as shares, and do not forget to declare your dividend receipts.”
You also need to declare any income from renting out or selling a second property, but not any investments held inside a tax-free Isa.
Even if you do not have to submit a return you should take this opportunity to cut your future tax bills.
Danny Cox, chartered financial planner at Hargreaves Lansdown, said couples should make full use of their personal allowance, which allows everyone to earn up to £11,000 without paying any tax: “If you are married and your spouse pays less tax, then move income yielding savings into their name.”
Under the personal savings allowance the first £1,000 of savings income will be tax free for basic rate taxpayers, falling to £500 for higher rate 40 per cent taxpayers.
“Bank and building society accounts now pay interest without any tax deducted.
“Use your tax-free Isa allowance if income from other sources, such as corporate bond funds or peer-to-peer (P2P) lending, takes you over the limit,” Cox said.
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“You can now take the first £5,000 of any dividend income tax free.
“A couple could receive £10,000 dividend income a year with no tax to pay, equivalent to a £285,000 portfolio yielding around 3.5 per cent.”
Dividend income above that is taxed at 7.5 per cent for basic rate taxpayers, rising to 32.5 per cent for higher rate taxpayers and 38.1 per cent for 45 per cent taxpayers.Anyone who misses the deadline will be forced to pay a £100 fine
“Married couples should manage their income yielding shares and funds to make full use of the dividend allowances and tax bands,” Cox added.
You can also claim tax relief on pension contributions at either 20, 40 or 45 per cent, depending on your tax bracket.
From age 55 you can take 25 per cent of any pension withdrawal free of income tax, although the remainder is subject to income tax if above your personal allowance, Cox said.
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Rachael Griffin, financial planning expert at Old Mutual Wealth, said parents and grandparents can cut their liability by making gifts to children or grandchildren.
She said: “You can make tax-free contributions of up to £4,080 into a Junior Isa in the current tax year, or up to £3,600 into a pension on their behalf.”
You can cut your inheritance tax exposure by making gifts of up to £3,000 to a child or grandchild, plus another £3,000 if you did not do this last year.
“You can give as many gifts of up to £250 as long as you have not used another exemption to the same person,” she added.
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