Last call to submit tax returns for 2018/19

We may only be a few weeks into 2020, but that didn't stop HMRC from releasing a cringeworthy press release urging taxpayers to "get quacking".

That dreadful pun serves as a reminder that the deadline for submitting tax returns relating to 2018/19 is at midnight on 31 January 2020.

The same deadline also applies to make any balancing payments to clear tax bills for 2018/19.

At the same time, the first payment on account is due for 2019/20 ahead of the second deadline on 31 July 2020.

A total of 11,718,339 tax returns needed to be completed for 2018/19 and more than half of those - 6,310,630 - were in by New Year's Day.

While the number of tax returns yet to be submitted before the midnight deadline for 2018/19 has fallen since, 46% were due at that point.

Angela MacDonald, director-general for customer services at HMRC, said:

"The self-assessment deadline on 31 January is fast approaching so customers have just under a fortnight left to file their tax returns online to avoid any unnecessary penalties. Any tax owed is also payable by 31 January.

"I would urge anyone who is expecting to find it difficult to pay their tax to get in touch with us as soon as possible. We will do everything we can to help and provide practical support.

"If you are completing self-assessment for the first time or are yet to start your 2018/19 tax return, there is a wide range of support."

Submitting tax returns for 2018/19

Most people need to submit a tax return if they are self-employed and earned more than £1,000 in the tax year or have untaxed income of more than £2,500.

Self-employment covers sole traders and partners, while untaxed income could be from tips or commission, rental income, savings, investments or dividends, or foreign income.

Higher-rate taxpayers in receipt of child benefit and those with annual income of more than £100,000 also need to submit tax returns, as do employees claiming expenses in excess of £2,500.

First payment on account for 2019/20

If you are submitting a tax return for 2018/19 and you're required to make payments on account, you need to make your first advance payment on account for 2019/20 at the same time.

Payments on account count towards your next tax bill and are based on the amount you owe for the previous tax year.

In practice, that means your 2019/20 tax bill will be based on what you've paid for 2018/19.

The first payment on account for 2019/20 needs to be paid by midnight on 31 January 2020, while the second one is on 31 July 2020.

By paying two instalments of your tax bill for 2019/20, you split the costs evenly over six months before the time comes to submit your tax return.

Settling tax bills for 2018/19

If you made payments on account for 2018/19 and you owe more tax than you've already paid, you will need to make a balancing payment to settle your bill.

For example, if you paid £3,000 on account for 2018/19, and it transpires that you actually owed £3,400 when you do your tax return, you will need to pay a balancing payment of £400 to HMRC by midnight on 31 January 2020.

HMRC expects these to be paid by midnight on 31 January 2020 and will settle your 2018/19 tax bill.

Talk to us about self-assessment.