According to the office of national statistics, the level of self employment in the UK has risen from 3.8 million in 2008 to 4.6 million in 2015. Those who are self employed have a legal responsibility to ensure a self assessment tax return is filed, and also ensure any outstanding tax is paid from the last tax year ending 5th April 2016, not doing so can result in fines from HMRC.
To help you keep on top of your tax obligations and avoid penalties, we will run the various stages of completing your self assessment return:
Registering With HMRC
If you need to submit a self assessment tax return, you will first need to register with HMRC. Registration can be completed online, by phone or by post. You will need your NI number to register, along with your personal details and your business details.
Once registered, you will be issued a unique taxpayer reference number (UTR). This number will be used to submit any future self assessment – so keep a record of it. Following registration, you should also receive an email or letter from HMRC on or around the 6th of April following the end of the tax year reminding you to submit your self assessment return.
Record Keeping For Your Self Assessment
Proper record keeping throughout the tax year will make yours (or your accountants) job a lot easier when it comes to completing your self assessment. If you are planning on completing your own self assessment, take a look at our guide to organising your self assessment records.
How Do I Complete My Self Assessment?
If you’ve never filed a self assessment before you will need to create a government gateway account. This can be done with the UTR you received when registering with HMRC, you will then be sent an activation code in the post – this can take up to 7 working days to arrive so plan accordingly.
If you’ve filed your self assessment online before, simply log in to HMRC online service and fill out your self assessment form using your financial records.
Self Assessment and Payment Deadlines
The following dates outline when self assessment forms must be filed, and when tax owed from the previous tax year must be paid:
- 5th October – By this date you must have registered for self assessment. You can be fined if you have not registered by this date.
- 31st October – If you are sending off your tax return in paper form, it must be filed by this date. If you have missed the paper deadline, you will be fined for filing it late; therefore it would be wise to complete your tax return online instead.
- 31st January – If you are sending off your tax return online, it must be submitted by this date. Again, you will be fined for late submissions.
- 31st January – This is also the deadline for paying the tax owed for the previous year as well as your first payment on account.
- 31st July – This is the deadline for the second payment on account.
When paying your tax, you must ensure the payment reaches HMRC, before midnight on the deadline dates. Therefore, plan accordingly depending on what payment method you use.
What Happens If I Miss My Self Assessment Deadline?
If you miss the return date for your tax returns, you will be subject to a fine, the fines you will face escalate the longer you do not pay, therefore, unless you have a reasonable excuse, you should file your tax return as soon as possible:
- One Day Late – For filing your tax return just 1 day late, you will receive an automatic fine of £100.
- Three Months Late – Filing 3 months late will result in a penalty of either £300 or 5% of the tax due, this will apply on top of the one day late penalty.
- Six Months Late – This will result in a £300 fine or 5% of the tax due, this will apply on top of the previous penalties.
- 12 Months Late – This will result in another £300 fine or 5% of the tax due, this again will apply on top of the previous penalties.
If you have filed your self assessment but miss the payment dates for the owed balance, you will be subject to interest charges – you can calculate your penalty for late filing and payments here.
I’ve Been Sent A Tax Return Form But I Don’t Have Any Tax To Pay
If you have received an email or a letter from HMRC asking you to complete and send off a self assessment tax return, you are legally obligated to do so – even if you have no tax to pay.
Need A Hand?
We’ve been working with the self-employed for years, maintaining accurate accounting records of their businesses, filing self assessment returns on time, saving them time and money to allow their businesses to thrive. If you require any help with your self assessment returns, give us a call on 0117 379 0810 or fill out a contact form and we will get back to you.
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This post was written by Steph Roffey