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Higher earners failing to claim tax relief

Higher-rate taxpayers who do not submit a tax return could be overpaying tax, according to Which?

A survey on 4,000 people found that 76% of high earners do not complete a return as they believe tax is automatically deducted from their earnings or pension through PAYE.

This means that individuals could be failing to claim tax relief on pension contributions and charitable donations.

For example, charities receive basic-rate tax relief at 20% on donations, resulting in an extra £25 for each £100 donated. Higher-rate taxpayers claim an additional 20% relief when filing a tax return, meaning each donation reduces their bill by £25.

30% of those high earners surveyed contribute to a pension and could be claiming tax relief on their contributions through self-assessment.

Research by HMRC found that 4.6 million people paid higher rate tax in the 2015/16 tax year. 59% of those who made charitable donation did not claimed tax relief.

John Cullinane, tax policy director at Chartered Institute of Taxation, said: 

“Anyone who is self-employed is required to file a self-assessment return, whether they are a sole trader or in partnership. This includes people who work in the ‘Gig Economy’ or have a second income from trading on eBay and similar websites.”

Get in touch with us today about self-assessment.

Why Clients Choose Easy Accountancy

Easy Accountancy offers a low cost, fixed fee accountancy package with all clients receiving their own dedicated, friendly, approachable accountant.

All of our accountants specialise in providing accountancy services to the self-employed, freelancers, sole traders, small to medium sized limited companies and private individuals. All accountants are employees of Easy Accountancy and we never outsource or offshore work.

Our low cost, all-inclusive fixed-fee accountancy service includes unlimited access to your own dedicated accountant throughout the year and covers all your business and personal tax affairs needs.

All our accountancy services include:
  - Unlimited access to your accountant
  - Ongoing advice on how to manage your business
  - Proactive tax advice throughout the year
  - Updates and reminders so you'll never miss a deadline
  - Free bookkeeping software

As a sole trader our fees start at just £60 + VAT a month, for this you receive the above plus:
  - Completion of your Self-Assessment tax return
  - Advice on how much Income Tax to pay
  - Guidance on National Insurance contributions

As a limited company our fixed fee packages are bespoke to your needs, however typically you’ll receive the above, plus:
  - Completion of your year end accounts*
  - Completion and submission of your annual return Companies House
  - The director/s Self Assessment tax return
  - Payroll bureau
  - Dividends and corporation tax computations

We’ve saved our clients up to half on their accountancy bills – if you’d like a quote, click on the quote me button to the right of this page. Alternatively, call us on 01442 275767 or email heather@easyaccountancy.co.uk.

*If you would like us to complete your company year end accounts we simply ask that you have been a client of Easy Accountancy for one year or have made 12 monthly payments.