If you have submitted a self-assessment return and later realise you need to make changes, there are specific rules to follow. This situation might arise if, for instance, you entered a number incorrectly or omitted certain information from your self-assessment return.

If you filed your return online, you could amend your return online as follows:

1. Sign in to your personal tax account using your Government Gateway user ID and password.
2. From ‘Your tax account’, choose ’Self-Assessment account’ (if you do not see this, skip this step).
3. Choose ‘More Self-Assessment details’.
4. Choose ‘At a glance’ from the left-hand menu.
5. Choose ‘Tax Return options’.
6. Choose the tax year for the year you want to amend.
7. Access the tax return, make the corrections, and file it again.

You must wait 3 days (72 hours) after filing before updating your return. If you opted to file your return on paper, you would need to download a new return and fill in the pages that you wish to change and write ‘amendment’ on each page. You must also include your name and Unique Taxpayer Reference on each page and then send the corrected pages to the address where you sent your original return.

If you used commercial software to submit your self-assessment return, then you should contact your software provider in the first instance. If your software provider cannot help, contact HMRC.

The deadline for making changes for the 2022-23 tax year using the methods mentioned above is 31 January 2025. If you miss this deadline, you will need to write to HMRC. For example, if you discover an error in your 2021-22 return after 31 January 2024. Your letter should specify the tax year you are correcting, explain why you believe you have overpaid or underpaid tax, and state the amount involved. You can request a refund up to four years after the end of the relevant tax year.

A final reminder that the 2023-24 tax return deadline for taxpayers who continue to submit paper self-assessment returns is 31 October 2024. Late submission of a self-assessment return will incur a £100 late filing penalty. The penalty usually applies even if there is no liability or if any tax due is paid in full by 31 January 2025.

We would recommend that anyone still submitting paper tax returns consider the benefits of submitting the returns electronically and benefit from an additional three months (until 31 January 2025) in which to submit a 2023-24 return.

Taxpayers with certain underpayments in the 2023-24 tax year can elect to have this amount collected via their tax code (in 2025-26), provided they are in employment or in receipt of a UK-based pension. The coding applies to certain debts and the amount of debt that can be coded out ranges from £3,000 to £17,000 based on a graduated scale. The maximum coding out allowance only applies to taxpayers with earnings exceeding £90,000.

Daily penalties of £10 per day will also take effect if the tax return is still outstanding three months after the filing date up to a maximum of £900. If the return still remains outstanding further higher penalties will be charged from six months and twelve months after the formal payment deadline.

Cash Flow Forecasting

Creating a cash flow forecast helps you predict your inflows and outflows, allowing you to anticipate any cash shortages. Update it regularly, be conservative in estimates, and account for any seasonal trends. A well-maintained forecast can help you identify potential issues early on and take corrective actions.

Speeding Up Cash Inflows

Encourage customers to pay promptly by offering incentives for early payments or tightening credit terms. Automated invoicing can also speed things up. If you’re struggling with long payment cycles, consider invoice factoring, where you sell invoices to a third party to unlock cash quickly.

Control Cash Outflows

Negotiate extended payment terms with suppliers, and stagger payments throughout the month to maintain cash in your account longer. Review expenses regularly and eliminate unnecessary costs. Using business credit cards for small purchases can help but be cautious about interest rates.

Build Cash Reserves

Aim to have an emergency fund that covers at least three months’ worth of expenses. This will provide a safety net during slow periods. Set aside money for tax obligations, such as VAT and corporation tax, to avoid any last-minute cash crunches when payments are due.

Use Financing Options

If necessary, consider short-term financing options such as overdraft facilities or short-term loans. These can provide relief during a cash crunch but should be used strategically and sparingly to avoid long-term financial strain. Invoice financing is another option if you have cash tied up in outstanding invoices.

Review Your Pricing Strategy

Make sure your prices are in line with your costs, especially if inflation or other market conditions have driven up your expenses. Periodic reviews of your pricing can ensure you’re generating enough revenue to cover costs and build cash reserves. Adjust prices if necessary and consider a value-based pricing model.

Monitor Key Metrics

Keep a close eye on metrics like Days Sales Outstanding (DSO), which tracks how quickly customers are paying. The lower the DSO, the better for your cash flow. Also, monitor your gross profit margin and liquidity ratios, ensuring you have enough cash on hand to cover liabilities.

Plan for Growth

Rapid growth can strain cash flow if you don’t plan for it properly. When expanding, ensure your forecasts account for the additional costs you’ll incur. Where possible, opt for gradual, sustainable growth, and consider pre-selling products or services to raise cash in advance.

Are you using the best VAT scheme?

Consider using the VAT Cash Accounting Scheme if you’re VAT-registered and qualify to use this scheme. It lets you pay VAT only when you’ve been paid by your customers, easing cash flow pressures.

Prepare for Uncertainty

Scenario planning helps you prepare for unexpected cash flow problems. By considering best, worst, and expected cases, you’ll be more prepared for any surprises. Insurance can also help by covering unexpected events that could otherwise create a financial burden.

We can help

If you are experiencing cashflow difficulties and would value advice with implementing any of the above strategies, please call, we can help.

There is unlikely to be much to celebrate when Rachel Reeves delivers her first Budget on the 30^th of October.

Speculation is rife regarding the likely targets for tax increases. We have listed a few of the more persistent predictions below. But note, these are just predictions and there will no doubt be “surprises” when the Budget details are released.

Personal Taxes and Pensions

Labour has pledged not to increase the main rates of Income Tax, National Insurance (NI), or VAT, but other forms of personal taxation may be impacted. Pensions, in particular, are expected to be a focus. For example:

• There are discussions around reducing the tax-free pension lump sum from its current level (£268,275) to a lower amount, which could raise around £2 billion annually​.
• Flat-rate pension tax relief, replacing the current marginal rate system, may be introduced, which could save the government around £5 billion, but it would negatively affect higher earners​.
• Employer pension contributions could also face National Insurance charges, which may lead to employers offering less generous pension schemes​.

Capital Gains Tax (CGT) and Inheritance Tax (IHT)

CGT rates could be increased, with some speculation suggesting they may be aligned with Income Tax rates, raising the top rate from 20% to as much as 45%. This would significantly impact higher earners and business owners. Another option is introducing a "double death tax," where assets are taxed both via CGT upon death and subsequently through IHT​.

Regarding IHT, Labour might increase the tax rate above the current 40% or reduce the £325,000 nil-rate band. Pension pots, currently excluded from IHT, could also be brought into the fold​. .

Business Taxes

While Labour has ruled out large hikes in business taxes, some changes are expected. For example:

• National Insurance Contributions (NICs): A rise in employer NICs from 13.8% to 14.8% is a possibility, potentially raising £8–9 billion for the Treasury.
• Carried Interest and Energy Profits Levy: Reforms to the taxation of carried interest, particularly affecting private equity, and an extension to the Energy Profits Levy are likely to be part of the Budget​.

Other Measures

• Fuel Duty: For the first time in 13 years, fuel duty may be increased, partly as a move to promote the adoption of electric vehicles​.
• VAT on Private Schools: Labour has committed to imposing VAT on private school fees starting in January 2025, a measure that could generate additional revenue but has sparked debate​.

Overall, the October 2024 Budget is shaping up to include "painful" decisions as Labour looks to tackle the fiscal deficit, with changes focused on wealth and asset taxes, pensions, and potentially significant tweaks to business taxation policies.

HMRC has issued a new press release reminding readers of a limited-time opportunity to enhance their State Pension. Currently, there is an opportunity for affected individuals to address gaps in their National Insurance Contributions (NICs) for tax years between April 2006 and April 2018. Originally set to end on 5 April 2023, this deadline has been extended several times and will now close on 5 April 2025. This means there are just under six months left for those who may benefit from this extension to act.

Usually, HMRC allows voluntary NIC contributions for the previous six tax years, with the deadline being 5 April each year. You can check your State Pension forecast and any gaps in your NICs by using the "Check Your State Pension" service on GOV.UK: https://www.gov.uk/check-state-pension. Since launching the service in April 2024, HMRC reports that over 10,000 payments totalling £12.5 million have been made through the digital service to help people boost their State Pension.

You might consider making voluntary NICs if:

• You are close to State Pension age and do not have enough qualifying years to get the full State Pension.
• You know you will not be able to get the qualifying years you need to get the full State Pension during the remainder of your working life.
• You are self-employed and do not have to pay Class 2 National Insurance contributions because they have low profits.
• You live outside the UK but want to qualify for some benefits.

If you fall into any of these categories, it may be worthwhile to apply for a State Pension forecast and assess whether making voluntary NICs to fill in any gaps would be beneficial. Keep in mind that not everyone will benefit, as this will depend on factors such as your age and NIC contribution history.