Many Brits will be spending the weekend frantically working on their tax returns. The HMRC has warned that this year's self-assessment deadline is just a few days away.
Missing the deadline of 11.59pm on Tuesday, January 31, could result in a £100 fine. And that could rise for anyone who is even later paying.
This coming week's deadline relates to the 2021/22 tax year, which ended on April 5, 2022. With just a few days to go, HMRC estimated that around 3.4million people had still not filed their returns. A total of 8.7million can rest easy, having completed theirs.
Self-assessment normally applies to people who don't have tax automatically deducted from their wages. This means self-employed people, as well as those who have earned extra money outside their main job that hasn't been taxed at source, reports the Mirror.
Do I need to file a self-assessment tax return?
According to MoneyHelper.org.uk, you will need to file a self-assessment tax return if:
Your self-employment income was more than £1,000 (before taking off anything you can claim tax relief on)
Your income from renting out property was more than £2,500 (you’ll need to contact HMRC if it was between £1,000 and £2,500)
You earned more than £2,500 in untaxed income, for example from tips or commission
Your income from savings or investments was £10,000 or more before tax
You need to pay Capital Gains Tax on profits from selling things like shares or a second home
You’re a director of a company (unless it was a non-profit organisation, such as a charity)
You, or your partner’s, income was over £50,000 and you’re claiming Child Benefit
You have income from abroad that you need to pay tax on, or you live abroad but have an income in the UK
Your taxable income was over £100,000
If you earn over £50,000 in the 2021/22 tax year and make pension contributions you might have to complete an assessment to claim back the extra tax relief you’re owed
You’re a trustee of a trust or registered pension scheme
Your State Pension was your only source of income and was more than your personal allowance
You received a P800 from HMRC saying you didn’t pay enough tax last year.
You can also check online through the HMRC website if you need to send a tax return.
How do I file a self-assessment tax return?
If you've never submitting a tax return before, you'll need to register for self-assessment through the HMRC website. By registering for self-assessment online, you will be sent a unique taxpayer reference which you will need to use to log in for the first time.
You'll then need to register and set-up your online account. If you've filed a return previously, you should already be registered. The deadline to register for a self-assessment tax return was October 5, 2022, and it can take up to 10 working days for you to receive your reference number.
Doing your tax return online is now the only way to submit your documents to HMRC without being fined. The deadline for filing paper tax returns was October 31, 2022.
But this Tuesday (January 31) isn't just the deadline for submitting your self-assessment. Your first payment on account - an advanced payment some people have to pay toward their tax bill, due twice a year in January and July - falls on January 31 every year. If your tax bill turns out to be higher, then you will need to make a balancing payment - the deadline for this is also on January 31.
What happens if I don't file my self-assessment tax return?
If you miss the tax return deadline, you could be fined £100 - even if you don’t have any tax to pay. If you are more than three months late, HMRC can add an extra £10 a day penalty for the next 90 days.
After six months, you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater. This is repeated after 12 months.
You’ll also have to pay interest on the tax you owe, plus any fines accrued. You should contact HMRC as soon as possible if you can't pay your tax bill. You may be able to set up a payment plan to pay it in instalments - this is known as a "Time to Pay" arrangement.
