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January 15, 2014updated 11 Jan 2016 1:37pm

Top seven tips for filing your tax return

By Spear's

So, you’ve survived a surfeit of in-laws, turkey and New Year celebrations – but now it’s January. It always feels like a cruel joke that, in the same month that you are attempting some degree of observation of your rashly-undertaken resolutions (possibly including abstinence from alcohol), you have to complete your tax return.

To make your task a little less painful, in this blog we give you some top tips for this year’s tax returns, together with a few reminders for other tax issues you shouldn’t forget.

Read more on tax and trust from Spear’s

1. Almost all tax returns now have to be filed online. As it takes at least seven days to complete your registration and activate your online filing code, if you haven’t already got one, you’ll need to apply before 21 January. Otherwise, you won’t be able to file your return by midnight on 31 January and that will automatically cost you a fine of £100.

2. If you’ve made gift aid payments to charity between 6 April 2013 and the date you submit the return, you can carry them back into last year. This is good news for those who paid 50 per cent tax last year, as they can claim tax relief at that higher rate, and not this year’s 45 per cent rate.

3. You might need to file returns for other people or entities too, if you’re an executor or personal representative for someone who has died since 6 April 2012, or a trustee. And if you have children under eighteen, and they receive income from gifts you’ve made, you will need to report that income on your tax return.

4. Remember that, from 6 April 2013, the annual cap on income tax relief applies, so you can’t claim tax relief on more than 25 per cent of your income (or £50,000 if greater). The reliefs include trading losses and qualifying loan interest (among others). If you made trading losses in 2012/13, check if you can carry them back into previous years (useful if they would exceed the cap if carried forward).

5. While claiming relief for your pension contributions in 2012-13 (maximum £50,000), remember to maximise your pension contributions for the current year. On 6 April 2014, the annual allowance will drop again from £50,000 to £40,000. You can still contribute a sum representing this year’s allowance, and any unused parts of your allowance from the last three years.

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6. Don’t forget you may have to submit a return even if you don’t owe any tax. This is particularly important for those who are not domiciled in the UK and want to claim the remittance basis – if you don’t file your return (electing to use the remittance basis), you are automatically taxable on all your worldwide income.

7. GAAR. No, not just a general expression of disgust at having to complete your tax return, but a reminder that the general anti-abuse rule applies to transactions initiated after 17 July 2013 which were intended to give you a tax advantage, and which might be seen as artificial and/or abusive. If you’ve entered into any tax ‘schemes’ or specially-designed arrangements intended to reduce your tax bill, and these arrangements were entered into on or after 17 July 2013, the beneficial tax effect you wanted to achieve can be removed if the arrangement is seen as abusive.

Arabella Murphy is a partner at boutique private wealth law firm Maurice Turnor Gardner LLP

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