Why you must act now for many happy tax returns: Sarah Coles

Before you do anything else, check you can get into the Government Gateway – the bit of the government website where tax returns are submitted. If this is your first time doing a tax return online and you’ve not registered for the Gateway yet, it will take up to ten days for an activation code to reach you by post, so the sooner you request it, the better. If you’ve used the Gateway before, but you’ve lost your ID or password, you can recover them, but check them now, and save yourself the last-minute stress.

Give yourself a bit longer to deal with anything you’re not sure about. This year, the HMRC self-assessment helpline won’t offer any help with queries it feels can be solved easily online - unless you’re a vulnerable customer. It means if you call for things like updating your personal details, checking if your self-assessment registration has been done, or asking for your unique taxpayer reference number, you’ll be sent to the website instead. It means leaving yourself enough time to get to grips with all the resources available on the website. A useful place to start is: Personal tax: Self Assessment - detailed information - GOV.UK (www.gov.uk)

Factor in the impact of frozen tax thresholds. If a pay rise pushed you over the income tax threshold into paying higher or additional rate tax, consider the implications for your broader finances. It’s not just about tax on income. You may need to reclaim tax on pension contributions or charitable donations, or you may need to pay tax on your savings now your personal savings allowance has dropped.

Consider child benefit. The high-income child benefit charge kicks in at £50,000. Annoyingly, this threshold hasn’t changed since it was introduced in January 2013. If it had risen with average wages, it would be almost £72,000 by now. If your income (or your partner’s) has pushed over this threshold, and you receive child benefit, you will need to repay at least some of it through self-assessment. If you tick the box, it will calculate what you owe.

Don’t rush the pensions bit. This is a really common area for mistakes to happen. Higher rate taxpayers need to make sure they claim higher rate tax relief, which isn’t always done automatically. For example, on a personal pension or SIPP, you need to reclaim the extra tax relief through your tax return.

When you do this, remember you need to enter the gross value of contributions. This isn’t just a total of all the money you paid in: it includes the tax relief on top. For example, if you’ve paid in £800, the gross amount after tax relief is added is £1,000. You’d be surprised how many people get this wrong.

Check you’ve submitted the return and paid your bill. Once you get to the final page, you have to click submit, so don’t forget this final step. It sounds ridiculous, but don’t forget to pay too. You’d be surprised how many people are so focused on the admin that they overlook this bit. If you owe tax, you need to pay this no later than 31 January or you’ll pay interest and a fine of £100.

If you can’t afford your bill, see if you can use a time-to-pay arrangement, which spreads your tax bill over the coming months. You should be able to do this online if you owe £30,000 or less, you’re within 60 days of the payment deadline, and you don’t already have a payment plan with HMRC. It will only be possible to set this up if HMRC thinks you can afford it, so it’s not a solution for everyone, and there is interest to pay on outstanding cash. However, it’s a better solution than simply missing the payment and paying fines on top of interest.

When you leave things this late, it’s tempting just to pay the bill and try to put it out of your mind for another year. However, it’s a brilliant opportunity to make two additional checks.

If filling in this tax return has revealed mistakes on previous ones, you can go back and correct mistakes for the previous year’s return online. You can claim a refund for a mistake made up to four years after the end of the tax year it relates to, but if the mistake happened longer than a year ago, you’ll need to write to HMRC.

Finally, consider what you can learn from your tax return. If you spent ages digging out details of dividends and savings interest – even if there was no tax to pay on them, consider moving them into an ISA, which means you’ll never have to include them on a tax return again. Similarly, if you ended up paying tax on savings or investments, look for ways to shelter them from tax, like an ISA or a pension – assuming you don’t need the money until retirement.

The sooner you start, the more time you’ll have for all these things. And if the last-minute dash was a horror-show, make this your incentive to be one of those unbearably smug people who make a start as soon as possible at the beginning of the next tax year.

Who is the main breadwinner?

The HL Savings & Resilience Barometer shows that in an average couple, one of them will earn three quarters of the household income. A significant part of the picture is that women tend to earn less than men, often because they’ve taken on the bulk of caring responsibilities. The gender pay gap tends to open in our 40s, as women pay the price for being the primary carer – first for children and then for elderly relatives. It’s one reason why, from the age 45, the balance gets increasingly one-sided, until at the age of 55-59, the main earner brings home 89% of the income.

This doesn’t just matter for reasons of fairness. Those with more balanced income tend to have more balanced finances. Where the main earner makes 60% or less of the household income, they’re more likely to have enough cash left at the end of the month, enough emergency savings, and to be on track for a moderate retirement income. They’re also more likely to have bought a house and have savings and investments.

If one person is bringing home most of the income - or all of it, consider whether you have enough protection in place – though emergency savings and insurance - if something goes wrong and that person cannot work. Don’t just focus on the higher earner though. You also need to consider cover for the lower earner, or any non-earner with caring responsibilities. If they can’t care for children or elderly parents, the breadwinner may need to step in or pay for care.

SARAH COLESHead of Personal Finance and Podcast Host for Switch Your Money OnHeadline Money Expert of the Year