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2021 Tax Return hints and tips for making the most of available tax allowances and reliefs

22.11.2021

Private Client

Christmas is coming…as is the electronic filing deadline for the 2021 Self-Assessment Tax Return

If you know you owe tax for the year ended 5 April 2021 of less than £3,000 and would like HMRC to collect it through your PAYE tax code to help your cashflow, your 2021 Tax Return needs to be filed electronically by 30 December 2021.

Failing that, you must file by 31 January 2022 if an automatic filing penalty is to be avoided.

Why don’t you get it done now, especially if you think you’ve overpaid tax for 2020/21 - before the frenzy of the festive period is in full throttle?

Read on for our list of handy hints and tips.

If self-employment or property expenses are less than £1,000 - you can save tax by claiming the £1,000 trading or property allowance instead.
Consider claiming the £7,500 rent-a-room allowance - if you let rooms in your home.
Is your property business commercial?
Tax relief for loan interest paid in respect of a property investment business is no longer claimed in the income and expenditure account, it is claimed separately and tax relief is restricted to 20%.
Restrict your claim for foreign tax relief in line with the double tax treaty.
Higher rate taxpayers should claim tax relief for pension contributions deducted from net pay or paid to independent pension schemes.
Did you know that you can carry back Gift Aid payments to charity made since 6 April 2021, as well as such payments made in the year end 5 April 2021, on your 2021 Tax Return?
If you’ve claimed SEISS Grants during the year ended 5 April 2021, they are taxed in the year of receipt and should be included in your 2021 Tax Return.
Don’t forget to reduce your payment of tax on account if you know your income for the current year ended 5 April 2022 will be lower.

When your 2021 Tax Return has been submitted, check HMRCs tax calculation carefully – especially if you have cashed in Life Assurance Policies or Bonds in 2020/21.

Have HMRC given you the correct tax credits against chargeable event gains?

If you would like our help in completing your Tax Return and checking tax calculations issued by HMRC, call one of our private client tax specialists n 01223 810100.