Are you going to make the tax return deadline?
If you’re among the £5 million taxpayers who need to file a tax return and have yet to do so; time is of the essence! The deadline of January 31st is a mere two weeks away.
Whilst a fortnight may seem like plenty of time there are a number of steps that you have to take before submitting the return, not to mention the time it takes to complete it which if you are not a professional can take around 3 days.
Things to consider
- The deadline above applies to online returns only, the deadline for submitting your paper tax return was 31st October so paper returns submitted now will now automatically result in a late penalty fine
- You need to be registered to complete your return online and have your login details
- If this is your first time filing a return you won’t have your login details yet so you will need to visit HMRC to enrol for the online service and get your activation code. It is important to note that this process may not be automatic so it is advisable to allow extra time for the code to be generated and sent to you. https://www.gov.uk/log-in-file-self-assessment-tax-return
Lost your login details?
Don’t panic, it happens to the best of us, especially in today’s password heavy world.
You can retrieve your password online as long as you know the email address that you used to set up the account. If you don’t you will need to call HMRC and explain in more detail.
You can also opt to get replacement by post but given the proximity to the deadline this route should be avoided if possible.
What are you paying for?
Your tax liability will be for any tax owing for the previous year as well as any “payment on account” liability for the upcoming year.
Payment on account is basically half of the expected tax due for the following tax year which is calculated based on what your earnings for the year before. An example of this would be a £1000 tax liability for this year, would result in a “payment on account” calculation of £500 for next year.
If you anticipate a significant reduction in your earnings this year or are planning on closing your business down you should discuss this with your accountant to arrange for your payment on account liability to be reduced.
Genuine reason for lateness?
If your personal circumstances have severely affected your ability to complete your tax return HMRC do have a reasonable excuse policy. Acceptable excuses include accident or disaster situations such as an IT failure or unexpected illness. Visit HMRC for a full list of reasonable excuses. https://www.gov.uk/tax-appeals/reasonable-excuses
What happens if you miss the deadline?
If you miss the deadline and have no reasonable excuse you will be charged an automatic penalty of £100, this applies even if you don’t actually owe any tax. You will then essentially have a month’s “grace” before additional charges come in to play with a maximum fine of £1300 if you have not submitted it by May 1st
An online calculator for estimating how much you will have to pay in fines is available here https://www.gov.uk/estimate-self-assessment-penalties
Feeling overwhelmed and need some advice?
Our tax team are ready to help and offer advice on how best to proceed with your personal tax return so if you have any concerns please do get in touch.
Email: firstname.lastname@example.org or call 0161 359 3235