Money Q&A: Remember, remember the end of September

You recently suggested the much-advertised tax deadline of 30 September isn't what it seems. Would you restate in the most unambiguous terms exactly what this means?

RB, KENT

There's a lot of misunderstanding around. You have had your tax return since April. Why not fill it in as soon as possible and get it out of the way? But, if you are an incurable procrastinator, you still have until 31 January 1999 to send back your 1997/8 return. If you miss that deadline, it will cost you pounds 100.

This date is also a payment deadline. If your payment is late, it starts accruing interest, currently 9.5 per cent - not too expensive against many other loans, including overdrafts and credit cards. But if you still haven't paid the tax by 28 February 1999, Inland Revenue "borrowing" becomes expensive, with a 5 per cent surcharge.

To guarantee you will get a tax bill by 31 January 1999, the Revenue says it must receive your completed tax return by 30 September 1998. But your bill may come before 31 January, even if you miss this deadline.

For its own convenience, the Revenue is happy for people to think 30 September has another significance. Journalists, accountants and others have played along with this. Many people who miss the deadline mistakenly believe they will have to work out their own tax bill. They may pay an accountant or other tax professional hundreds of pounds to do it. But you can always ask the tax office to work out the bill, whenever you send in your tax return.

What if your tax office does not send you a tax bill in time to pay by 31 January, because you did not get your form in by 30 September? Work out roughly what is due (possibly based on what you paid last January) and pay that amount.

One other possible complication. If you pay most of your tax under PAYE, but still owe some higher rate tax or tax on non-PAYE income, this can also be collected under PAYE - if you get your tax return back by 30 September. If you don't, you will have to pay the tax in a lump sum on 31 January.

Future windfalls

We are thinking of buying a wreck of a property in France. To raise as much cash as possible, we want to close our Halifax account, with pounds 10,000 in it, and sell our Halifax shares. If we do this, could we be losing out on any future bonus or windfall?

TR, LONDON

There is no prospect of Halifax customers benefiting from further windfalls as they no longer own the Halifax. You have nothing to lose by closing accounts. This applies to all ex-building societies and previously mutually- owned insurance companies converted to plc status.

You do still part-own the Haifax through your shareholding, and your shares may benefit from a further windfall, such as a takeover bid. But pundits reckon that Halifax is too large for an early takeover. It may be some years, after financial services companies have merged, consolidated, and become more international and fewer in number, before Halifax seems like a minnow to be gulped up.

Smaller ex-societies such as Alliance & Leicester and Woolwich may be better candidates.

Write to the personal finance editor, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL, and include a phone number; or fax 0171-293 2096; or e-mail i.berwick@independent.co.uk

Do not enclose SAEs or any documents you want back. We can't give personal replies, or guarantee to answer letters. We accept no legal responsibility for advice given.

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