TOP TIPS TO AVOID TAX BILL HANGOVER
COVID SUPPORT PAYMENTS
IF you claimed Covid support payments during 2020/21, the funds that are taxable as trading income will need to be reported on your tax return. This includes payments from the Selfemployed Income Support Scheme, Eat-out-To-Help-out, business rate grants, Track and Trace payments, selfisolation payments, or Coronavirus Job Retention Scheme (furlough) payments for employees of your sole trade.
TRADING LOSSES
ConSIDER how best to claim tax relief if you made a loss despite any Covid support payments. you can claim to carry back the loss for up to three years to set it against profits in those earlier years and receive a tax repayment.
WORKING FROM HOME
THoSE who worked from home during 2020/21 can claim £6 per week as a tax deduction for the extra costs. If you did not claim this during the year through your PAyE tax code, you can claim it through your tax return.
NEW SIDE HUSTLE PAY
IF you started a business online or offline during lockdown, you should have notified HMRC by october 5 last year. you will need to show all your income and expenses, or if your earnings were relatively modest, you can just claim a £1,000 deduction from your gross income.
STAYCATION BOOM PROFIT
AnyonE who let out a property during the year must report rental income if it exceeded £1,000. If you let out your own home, it may be possible to claim rent-aroom relief on up to £7,500 of income.
CLAIM CAPITAL LOSSES
IF you realised capital losses on investments, do not forget to put these on your tax return. If you do not, they will not be available to use against gains in future years. you do not need to pay tax on any gains made within an Isa.
RESIDENTIAL GAINS
THoSE who sold residential property other than their main home during 2020/21 should already have reported this using a ‘capital gains on uK property account’ and paid any tax due within 30 days of the sale. Even if you did this correctly, you still need to disclose the gain and the tax you paid on your full tax return for the year — so don’t miss it off.
CHILD BENEFIT PAYBACK
you will be liable to the high-income child benefit charge if you or your partner have an annual income of more than £50,000 and one of you gets child benefit. you have to pay it all back if the income hits £60,000. If you were previously paying the charge but your income dropped during the year, you may be due a refund.