You have until 28 February this year to file your tax return without penalty, but, leaving it until the last minute is fraught with problems. If you are not registered with HMRC to complete your tax return online, you will need an activation code, which the website says will take up to 10 days to arrive. Here are some things to remember that may keep your income tax bill lower:

• Income streams: Pull together annual statements for savings and current accounts, and any dividend statements. Poor savings rates mean that you might not have to pay any tax on that income: if you otherwise earn less than £12,570 you can earn up to £5,000 in interest without being taxed. Above that, there are allowances for those earning less than £17,570, and a personal savings allowance, too. The personal savings allowance means basic rate taxpayers get their first £1,000 of interest tax-free, while higher-rate payers get their first £500 untaxed.
• Outgoings: You might be able to offset some of your outgoings against earnings. If you have made a capital gain through selling shares or an investment property, you can use losses from the same or a previous tax year to reduce it – you will need to register both on your form. For the self-employed, there are business expenses that can be claimed for including the cost of equipment and clothing. If you are an employee but have been forced to work from home because of the pandemic, you can make a claim for some of the associated expenses. For the 2021-22 tax year you can make an immediate claim for relief on £6 a week expenses online but if you did not do that for 2020-21 you do it in the employment section of the form.
• Include charitable giving: Higher-rate taxpayers who have given money to charity out of taxed income may be able to reduce their bill by claiming gift aid. You will need to have claimed gift aid when you made the donation, which would have boosted the charity’s coffers by 25p for every £1. On your form you claim the difference between basic and higher-rate tax. If you made a payment of £100 and the charity claimed 20%, you can claim the extra 20% of the total – £25. Regular monthly donations count, as long as you have signed up for gift aid, so include them.
• Check your partner’s earnings if you claim child benefit: If you or your partner claims child benefit then HMRC will be interested in both partners’ earnings. If one partner earns more than £50,000 it will want some of the benefit paid back – the charge is tapered so that by the time one person earns £60,000 the whole lot must be repaid. The form asks if either of you claimed the benefit, and if your income is higher or lower than your partner’s. It makes no difference whether you are married or not.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of January 2022 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.