With the deadline for self assessment tax returns looming, around 2.5 million people are still yet to submit their personal form.
The deadline for submission is the end of the week, and HM Revenue and Customs (HMRC) have revealed that a large number of returns still need to be filed.
Approximately 8.3 million have been returned to the tax authority so far, with the self-employed and those with more than one job needing to register by 31 January.
However, higher-earning parents who claim child benefit could also need to register and an estimated 103,000 parents have so far failed to do so.
The importance of submitting in time
The penalties for missing the deadlines are high, with an automatic £100 fine applicable, regardless of whether there is any tax to pay.
The current deadline applies for self-assessment forms for the tax year ending in April 2013, with all due taxes required before Friday’s deadline.
Failure to declare tax due three months after the deadline can mean daily penalties of £10 a day, up to a maximum figure of £900.
Six months further down the line and a further penalty of 5% of the tax due or £300 (whichever is greater) will also be due.
A similar situation exists after 12 months, meaning that a failure to declare can be a considerable expense.
However, three days is plenty of time for people to register online – as around 578,000 left it until 31 January last time out.
Changes during the last year
Changes to the benefit system have also meant that thousands of parents need to submit a return this year.
Where a parent has a taxable income of £50,000, if they received child benefit after January 2013 then they need to pay some back in tax.
Meanwhile, if one parent’s income exceeds £60,000 then all of it must be paid back. It is important to be clear about all of these specific regulations.
When the time comes to submit tax returns, the importance of good financial management really comes to the fore.
While keeping a check on spending is important, there are ways of ensuring you don’t spend more than you would like.
One such option is a prepaid card, which limits spending to the amount on the card at any given moment.
In addition to this, it is not directly linked to a bank account so funds are safer while they can be easily topped up or replaced if required.