Demystifying 2023 Tax Returns in the UK

24th January 2024

The UK tax system continues to evolve, bringing changes that affect taxpayers year after year. As the 2023 tax season approaches, individuals and businesses must understand the latest regulations, allowances, and deadlines for tax returns. This comprehensive guide breaks down everything you need to know about UK tax returns for 2023.

Overview of Key 2023 UK Tax Changes

Some notable tax changes for the 2023 tax year include:

  • The personal tax allowance increased to £12,570.
  • Dividend tax rates have increased by 1.25 percentage points.
  • The national insurance threshold increased to £12,570.
  • Energy profits levy introduced for oil and gas companies at 35%

These changes indicate some tax relief for lower-earning individuals but increased taxes for high earners and corporations with significant energy profits.

Understanding Who Needs to File Tax Returns

Tax returns allow HMRC to collect information and ensure individuals pay the right tax based on their income, gains, pensions, foreign income, etc. The main categories who need self-assessment tax returns are:

  • Self-employed individuals
  • Company directors
  • Employees and pensioners with annual income over £100,000
  • Those with untaxed income or gains, e.g. from investments, savings, pensions

Anyone in these groups must file timely and accurate returns reflecting their latest financial information.

Key Deadlines for Filing 2023 Tax Returns

To avoid late filing penalties, here are the key deadlines for 2023 tax returns:

  • Paper returns – October 31, 2023
  • Online returns – January 31, 2024
  • The tax year runs from April 6, 2022, to April 52023

Register for self-assessment by October 5, 2023, to file online. Taxpayers who miss deadlines may be charged penalties of up to 100% of the tax owed.

Top Reasons For Going Paperless This Year

More and more taxpayers are switching to paperless online returns given benefits such as:

  • Quicker processing and refunds
  • Calculation of tax owed in real-time.
  • Adjustments based on the latest allowances.
  • Secure HMRC portal for data protection
  • Environmental sustainability

For convenience and maximum refund potential, filing online is advisable.

2023 Deductions and Reliefs to Be Aware of

There are a range of deductions and tax relief options to claim, including:

  • Personal allowance for £12,570 of income
  • Pension contributions tax relief
  • Capital gains annual exemption increased to £12,300.
  • Rental property expenses, e.g. agent fees
  • Mileage allowance for business travel

Taxpayers should assess eligibility for all deductions and allowances to reduce their 2023 tax obligations.

Get Professional Support for Peace of Mind

With continual tax changes and complex reporting obligations, working with a qualified tax preparation specialist or tax accountant can optimise your tax position. They can ensure you accurately claim available deductions while complying fully with the latest HMRC rules and deadlines.

The 2023 tax season brings new changes and considerations for filers. You can simplify the process and minimise your tax bill by leveraging all available tax reliefs, transitioning to digital filing, meeting deadlines, and securing professional support. Use this guide as a helpful reference for UK tax returns this year.