Recent changes to HMRC working practices seem to have thrown up an anomaly where there are one or more trades (some of which carry brought forward losses) and employment or pension income. Immediately after the submission of a SAR, the total self-employment income, without allowing for future loss reliefs, is taken into account in coding, which has the effect of restricting personal allowances. The problem can be rectified within the taxpayer account but it is not straightforward.
In another case, where pension contributions are substantial and are not normally finalised until shortly before the end of the fiscal year, HMRC have hitherto given an acceptable estimate within the coding. In 2024/25, this was withdrawn as soon as the SA return for 2023/4 was submitted and not reinstated until contributions were actually paid.
Whilst there are obviously some advantages is timely submission of SARs, there would appear to be some cashflow benefits in deferring until shortly before 31 January.
*The views expressed are the author’s and not ICAEW’s
