A new year is typically the time to make new resolutions, so now that we are at the start of the new tax year, the subject of this blog, it’s a good time to resolve to get your finances in order.
When does the new tax year start?
On 6 April every year.
Who does this affect?
Those who are self-employed or who have income other than from PAYE employment – for example, landlords with a buy-to-let property or portfolio who receive rental income. If you sell an asset, such as a property that isn’t your main home, you may have to pay Capital Gains Tax.
From 6 April 2016, you should gather together all your documents and information relevant to the last tax year, which ran from 6 April 2015 to 5 April 2016.
When should you file your tax return?
By 31 October 2016 if you are sending in a paper return (form SA100) or by 31 January 2017 if you are filing online. There are penalties for late filing.
If you are using an accountant, bear in mind that every January they are swamped by clients sending in information at the last minute. If you send everything in earlier, it will give your accountant more time to put your tax return together – and you won’t have to pay your tax bill any earlier.
You can find out more at: https://www.gov.uk/self-assessment-tax-returns
What about those who run a limited company?
If you run a limited company – even if you are the only employee – your company tax year will start from the end of the month when you first set up your business as a limited company. However, any dividends paid to you from company profit should be added to your self-assessment tax return.
When should you consult an accountant?
If you have a very simple tax return, for example, you are not self-employed but have one buy-to-let property, you may be confident that you can fill it in yourself.
However, bear in mind that several changes have been introduced recently by the Chancellor, George Osborne. These include a 3% stamp duty surcharge for new investors (from 6 April 2016) and phasing out higher rate tax relief on mortgage interest payments, plus a cut to wear and tear allowances (from 6 April 2017).
If you are self-employed, an accountant will be able to explain your tax requirements and allowances – ensuring you pay the right amount of tax on your earnings.
Accountants can also help with tax planning, as they will be up-to-date on legislation and what it means for your company and for you as an individual.
What about a career in accountancy?
If you’re interested in a career in accountancy, one route in is by studying for an AAT Accounting qualification. Open to all, AAT will give you internationally recognised finance and accountancy skills.
CMS Vocational Training offers weekly classroom workshop and distance learning for this qualification, which could lead to a wide range of jobs in a variety of sectors (see our blogs on AAT Accountancy courses and Accountancy courses and apprenticeships).
You can also use your AAT qualification as a base to further your studies and move into chartered accountancy.