The 31st January Self Assessment deadline is approaching and with the imminent Christmas break, many people leave it until the last minute, or even past the deadline to submit their return, receiving unwelcome penalties.
Not only does leaving your tax return to the last minute make you more susceptible to making mistakes and errors in rushing to meet the deadline, it also leaves you more vulnerable to falling victim of reported fraud attacks.
If you need assistance in submitting a Self Assessment or are unsure if you are required to submit one, you can contact a tax specialist at Alexander & Co for assistance.
To help you understand more about Self Assessment, we clarify some of the questions our tax team are often asked below:
Will HMRC inform me if I need to submit a return?
If HMRC has asked you to complete a Self Assessment return for 2018-2019, you must complete it before 31 January 2020 or face a fine. Some people (those who are self-employed, for example) need to complete a tax return every year; others are sent one because they have untaxed income (often from property).
HMRC will not necessarily ask you to complete a tax form, as they are unlikely to know your full employment status for the previous tax year, therefore it is important to always check for yourself whether you need to submit a return.
When should I complete a Self Assessment tax return?
You must complete a Self Assessment tax return if, in the last tax year (6 April 2018 to 5 April 2019), you:
- Earn over £100,000 per year
- Earned more than £1,000 from additional income outside of your regular waged employment
- Made a capital gain (for example, from selling a property that wasn’t your main residence, or sold other investments, such as shares or antiques and artwork)
- Were a partner in a business partnership
- Were self-employed as a ‘sole trader’ and earned more than £1,000
Reporting other forms of income
You do not usually need to send a return if your only income is from your wages or pension. You may need to complete a Self Assessment if you have received any other untaxed income, such as:
- Foreign income
- From renting out a property
- Income from a hobby such as influencing & blogging, if it is more than £1,000
- Income from savings, investments and dividends
- Tips and commission
Are there any other reasons, besides declaring income when I should submit a Self Assessment?
If you receive child benefit and your income (or your partner’s income) was over £50,000, you may need to submit a return and pay the High Income Child Benefit Charge.
Whilst it is not mandatory, you can also choose to fill in a tax return to:
- Claim some income tax reliefs
- Prove that you are self-employed, for example, to claim Maternity Allowance or Tax-Free Childcare
What are the deadlines and the consequences of missing these?
The deadline for submitting a Self Assessment tax return online to HMRC for the previous tax year (6 April 2018 to 5 April 2019) is 31 January 2020. You are also required to pay what you owe by this date as well. If you submit a paper tax return this deadline has already passed (31 October 2019) and we recommend taking advice to submit this as soon as possible and minimise any financial penalties.
The deadline is different if you want HMRC to automatically collect tax you owe from your wages and pension. In this instance, it is 30 December 2019. To submit an online return and you must be eligible for this service.
If you are a trustee of a registered pension scheme or a non-resident company, HMRC must receive a paper tax return by 31 January. In these instances, you cannot send a return online, unless HMRC has given you a different deadline.
If your partnership’s accounting date is between 1 February and 5 April and one of your partners is a limited company, the deadline for online returns is 12 months from the accounting date (or 9 months from the accounting date for paper returns).
If you miss these deadlines, a penalty will be issued. This starts at £100 if your tax return is up to 3 months late and increases if it is later. You will also be charged interest and potentially surcharges on late payments.