There are a number of upcoming deadlines for Self-Assessment taxpayers:
- Registration for Self-Assessment: 5 October 2020
- Submission of paper tax returns: 31 October 2020
- Submitting of electronic tax returns: 31 January 2021
- Payment of tax liability: 31 January 2021
Who needs to register for a Self-Assessment tax return?
You will need to register for a Self-Assessment tax return if you were self-employed as a sole trader and earned more than £1,000, or you were a partner in a business partnership. You may also need to register if you have untaxed income, such as income from renting out a property, savings, and investments, etc. or you wish to claim reliefs such as higher rate tax relief on pension contributions and gift aid payments, or to claim job-related expenses. You can check if you should register for Self-Assessment at https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return.
What happens if you do not register?
If you do not notify HMRC of your liability to tax by the relevant date, you may incur a ‘failure to notify’ penalty. This is calculated as a percentage of the tax that is unpaid as a result of the failure to notify and can be as much as 100% of the unpaid tax (up to 200% if it relates to offshore sources). The percentage of the penalty is calculated depending on the behaviour of the taxpayer which led to the failure, the length of time the liability has been outstanding, and whether or not the notification was prompted or unprompted by HMRC.
HMRC will issue an initial £100 late filing penalty if your tax return is not submitted by the deadline. They will issue additional penalties if your return remains outstanding at the following dates:
3 months late – daily penalties of £10 per day (up to a maximum of 90 days)
6 months late – 5% of the tax due, or £300 if greater*
12 months late – 5% of the tax due, or £300 if greater*
*Increased penalties may be due if the taxpayer is considered to be deliberately withholding information which would enable HMRC to assess the tax due.
HMRC will issue late payment penalties if your tax liability is not paid on time at a rate of 5% of the tax outstanding at 30 days, 6 months, and 12 months after the due date. Interest will also accrue at HMRC’s official rate, which is currently 2.60%.
Are you submitting a tax return for the first time?
If you are submitting your Self-Assessment tax return for the first time, we recommend that you start preparing for this as early as possible. This is because there is a lot you will need to do, such as:
- Apply for a unique taxpayer reference (UTR) number.
- Register to submit online returns.
- Work out what taxes you will need to pay. The tax return covers income tax, national insurance, and capital gains tax.
- Complete supplementary pages as required, such as land and property, employment, and capital gains.
- Assess if you are able to claim any expenses and/or reliefs, based on the relevant legislation.
- Calculate if you are liable to make payments on account of your future liabilities.
- It is very important you take the time to do this correctly or you can end up paying too much or too little tax and put yourself at risk of receiving an HMRC enquiry, which can be very time consuming and stressful.
How can we help?
If you find yourself becoming overwhelmed by these requirements or you just want a professional to take the hassle away from you, then our tax specialists will be delighted to prepare and submit your tax return on your behalf. We can also identify any legitimate opportunities for mitigating your tax liability.
If you would like us to help you with your tax return, please contact us for a free initial meeting.
More from our tax experts
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