Tax year dates and changes - The deadline is coming..

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	14.9%	56 days
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Another tax deadline is approaching they seem to come round with remarkable regularity. This time it's July 31, which is the last date for making a payment on account for the tax you owe for the 2007-8 financial year, which ended last April. Whether you have completed your tax return or not, you need to make a contribution to the total amount that owe for the past year, which will usually be estimated using figures from the previous year.

Of course this only applies if you are self-employed, or you have other income that is not taxed at source. If you are employed or retired, and all your tax is collected under the PAYE (pay as you earn) system, you don't need to worry, Pensioners and employees are not usually sent a return. The main groups of people affected are those who work for themselves, higher-rate tax payers, people who receive income from abroad and people with income from property or untaxed income from investments.

All these people need to keep an eye on key dates so they don't incur penalties.

The end of July is also a key date for the backsliders who still owe tax that they were due to pay by January. They will now be hit with a second automatic 5% surcharge on top of the amount that they have failed to pay they have already paid one surcharge when they missed the January deadline.

To make matters worse, just when you thought you had got a grip on all the key dates for tax payments, HM Revenue and Customs starts to tinker with them. The main change you need to note is the new deadline for filing a paper return.

Traditionally you had until January 31 of the year following the end of the relevant tax year (so for the 2007-8 tax year just gone, you could leave filing your return until the end of January 2009).

This still applies for online filing, but the Revenue is trying to get as many people as possible to file online so has brought forward the last date for a paper return to October 31. If you miss this date, you will either have to file online or incur £100 penalty for sending a paper return in late.

Although the very thought of completing a tax return makes many people wince, it actually makes sense to file as early as possible. If there are any mistakes, you have a greater opportunity to spot them and get them corrected, and if you file before September 30 HMRC will calculate the tax due for you although, if you file on line, this calculation is unnecessary as the software does the sums for you and you will be able to see the figure you owe automatically.

Finally, if you are employed and you are completing a tax return because you have extra income that you need to pay tax on, you should try to complete your return by December 30. This means that if you owe less than £2000 you can ask HMRC to collect tax due through your PAYE coding saving you the need to write a big cheque up front. Of course this concession will not apply if you don't have a job or are self-employed.

See the key dates on the page 2

15 July 2008 © Moneyextra.com

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