As the 31st January deadline for submitting your Self-Assessment tax return looms, many of you may be feeling the pressure to file on time. Whether you’re a sole trader, a freelancer, or someone with other sources of untaxed income, it’s important to understand your obligations and avoid any last-minute panic (and fines!). If you’re unsure about the process or have burning questions about the deadline, you’re not alone. We’ve gathered some of the most common questions people are asking about the Self-Assessment tax return and provided answers to help guide you through the process.
1. What Is Self-Assessment and Who Needs to File?
Self-Assessment is the formal name given by HMRC for a personal tax return. It’s designed for people who don’t have their taxes automatically deducted from their wages, such as self-employed, contractors, or those with income from multiple sources like rental properties, savings, or investments.
You need to file a Self-Assessment tax return if you:
Are self-employed or a business owner.
- Have income from sources other than your salary (e.g., rental income, savings, investments)
- In receipt of dividends (over £500.00)
- Need to claim tax relief on employment expenses
- Have capital gains to report
If you’re unsure whether you need to file a return, it’s worth double-checking with your accountant or HMRC to avoid any penalties.
2. What Happens if I Miss the 31st January Deadline?
The 31st January is a strict deadline for filing your Self-Assessment return. If you miss it, you could face penalties. The longer you delay, the higher the penalties become:
Here is a short summary of the penalties applied:
- £100 Fixed Penalty: If you miss the deadline, you’ll automatically be charged a £100 penalty, even if you don’t owe any tax.
- Additional Penalties: If you’re more than 3 months late, further penalties will apply, including £10 per day for up to 90 days, and after 6 months, a penalty of 5% of the tax due or £300 (whichever is higher).
- Interest on Late Payments: You’ll also accrue interest on any unpaid tax, which could add up quickly.
3. How Do I Submit My Self-Assessment Tax Return?
The easiest way to submit your Self-Assessment tax return is online through HMRC’s website. If you’ve already registered for Self-Assessment, you can log into your online tax account (government gateway), complete the required sections, and submit your return.
If you haven’t registered yet, you’ll need to create an account and complete the registration process, which can take up to 10 days, so it’s important to get started as soon as possible.
If you’re not confident about filing your own return, it’s worth considering seeking help from a professional accountant. They can not only ensure that your return is submitted correctly but also help you make the most of any allowable deductions or credits.
4. What Information Do I Need to Complete My Tax Return?
Gathering all the necessary documents and information is key to filing a successful tax return. Here’s what you’ll need:
- Income Details: This includes income from employment (P60/P45), self-employment, rental properties, investments, dividends, and savings interest. For this deadline, the P60 will be dated 5th April 2024.
- Expenses: Keep track of your business expenses like office supplies, equipment, travel, and professional fees. You can deduct allowable business expenses to reduce your taxable income.
- HMRC Login Details: Make sure you have your user ID and password handy for online filing.
- Other Documents: If you’ve made pension contributions, donated to charity, or have other relevant financial documents, be sure to include them as these may qualify for tax relief.
If you’re unsure about what qualifies as income or expenses, an accountant can guide you on what to include and ensure you’re not missing anything.
5. Can I Pay My Tax Bill in Instalments?
If you owe tax but are unable to pay the full amount by the 31st January deadline, you may be eligible to set up a Time to Pay arrangement with HMRC. This allows you to pay your tax in instalments, which can help ease the financial burden. However, this must be arranged in advance, so it’s important to reach out to HMRC as soon as you know you will have trouble paying the full amount on time.
Remember, even if you set up an instalment plan, you will still be charged interest on the unpaid balance.
6. How Can I Avoid Common Mistakes on My Tax Return?
Many people make errors when filing their tax returns, which can result in delays or even penalties. To help avoid mistakes, keep these tips in mind:
- Double-check your figures: Ensure that your income and expenses are accurately reported.
- Don’t forget to claim all allowable expenses and deductions: You may be entitled to claim tax relief on working from home and travel costs.
- Keep good records: Properly organised records of income and expenses make filing much easier.
- Take your time: Don’t rush the process, as mistakes made in haste can lead to costly errors.
If you’re unsure about anything, it’s always better to consult an accountant rather than risk making a mistake.
7. What If I’ve Already Filed, But I Need to Make Changes?
If you’ve already submitted your Self-Assessment return but realise you’ve made an error or omitted something, you can amend your return. The deadline for making changes to your tax return online is 12 months from the date your original tax return was filed, so there’s time to correct any mistakes without incurring additional penalties.
If you need to amend your return, log into your HMRC account, and follow the steps to make changes. If you’re unsure about how to amend your return, ask your accountant for help.
Final Thoughts: Don’t Delay, Act Now!
With the 31st January Self-Assessment deadline fast approaching, now is the time to get everything in order. Whether you’re filing on your own or working with an accountant, don’t leave it until the last minute to submit your return. The sooner you get everything submitted, the sooner you can rest easy knowing your tax affairs are in order for the year ahead.
If you have any questions or need assistance with your Self-Assessment tax return, don’t hesitate to reach out to us. We’re here to help you navigate the process smoothly and ensure you meet the deadline without any hassle.
For more information about HMRC’s Self-Assessment, please visit the gov website on: https://www.gov.uk/self-assessment-tax-returns