Have you filed your Self-Assessment Tax Return?
The deadline of the 31st January 2017 is fast approaching for filing 2015/16 Self Assessments online, thousands will probably file late and will leave filing until January.
Even though we’ve had from April to do so, most of us wait until the last two months and take it right up to the wire! As per HMRC statistics 51%of returns were filed in January and 11% file after the due a date. Regardless of whether you have been running your business for years or you recently became an entrepreneur this year, or due to an additional income if you think that you need to complete a tax return. We recommend you start the process early and get your return completed, filed and any payment due paid as soon as possible to avoid late filling penalties and interest charge.
Indeed, the penalties for filing your return late have been increased in recent years, piling the pressure. There is a standard £100 fine for every single return filed late – even by a few minutes – but for those who continue to bury their heads in the sand, the costs keep on rising.
Penalties and interest
Once your return is three months late, there is a fine of £10 for each following day up to a 90-day maximum of £900 – this is in addition to the £100 fixed penalty, so the overall fine could be as high as £1,000. At six months late, an additional fine of either £300 or 5 per cent of the tax due – whichever is the higher – is payable on top of the penalties already incurred? And after 12 months, the same penalty is applied again. In the most serious cases, if you’re more than 12 months late with your tax return, you can be asked to pay a penalty of up to 100 per cent of the tax due as well as any tax you owe – effectively doubling your payment.
The other problem with failing to file your tax return on time is that it makes impossible to settle your tax bill by the 31 January deadline, since you can’t pay until you’ve worked out what you owe. And in addition to the late filing penalties, HMRC levies extra charges on late payment of tax.
To begin with, there’s interest to pay on all late payments at a rate that is the equivalent of 3 per cent a year (if HMRC owes you money, by contrast, it will pay interest at just 0.5 per cent). In addition, if any of your tax bill is still unpaid 28 days after the deadline – by midnight on 28 February – you’ll automatically be charged a 5 per cent surcharge on the amount. Another 5 per cent surcharge is added to the bill if you haven’t paid by 31 July.
The combined effect of all these fines, penalties and interest charges can be ruinous, particularly for small businesses that don’t face up to their problems. The best advice is to get your return in on time and to pay tax by when it is due.
Here are 3 of the most common problems, issues and errors that come up:
- Not leaving enough time to register for Self-Assessment – It can take 20 working days (this is usually 4 weeks) to complete the registration process, then for online returns, allow 10 working days (21 if you’re abroad) to register because HM Revenue and Customs (HMRC) posts you an activation code.
- Lost Login details – Your account will be locked for 2 hours if you enter the wrong user ID or password 3 times. If you’ve lost both your user ID and password.
- Leaving it too late to get help – If you need help from an accountant don’t leave it too late as they will need to carryout AML and other checks before they can file your return, they will also need your UTR
Self-Assessment Life Savers
There are only a few days left to file your Self-Assessment Return for 2015 and if you haven’t done it you might be starting to panic! a common reason for last minute filing is being unable to get the information to enter on the return, so what can you do?
Returns which include provisional or estimated figures should be accepted provided they can be regarded as satisfying the filing requirement.
- A provisional figure is one which the taxpayer / agent has supplied pending the submission of the final / accurate figure
- An estimated figure is one which the taxpayer / agent wishes to be accepted as the final figure because it is not possible to provide an accurate figure for example where the records have been lost.
- Correcting your return – If you make a mistake on your tax return, you’ve normally got 12 months from 31 January after the end of the tax year to correct or amend it. For example, if you send your 2015-16 online tax return by 31 January 2017, you have until 31 January 2018 to amendment it.
Do you need to complete a Tax Return?
Most taxpayers in the UK are taxed at source and so do not need to complete a Self-Assessment Tax Return. ‘Taxed at source’ means that the money you receive has already had tax taken off, such as the wages you get from your employer when paid under the Pay As You Earn (PAYE) system, or UK bank interest taxed at source.
People who have income that has not been taxed at source, or not taxed at the correct rate, and on which tax is due, are required to inform HM Revenue & Customs about the income within six months of the end of the tax year in which the income is received (that is by 5 October following the end of the tax year). HMRC will then send you a notice to file a tax return, either by post or electronically.
Such income would include, for example, rental income, self-employed income, savings income for higher rate taxpayers, and occasional untaxed income like eBay sales or casual freelance earnings, dividend or being a from UK companies director.
You also need to tell HMRC about taxable chargeable gains –
Help with your tax return
If you receive a tax return, or a notice to file on-line, you must complete a return and submit it to HMRC. This is so even if you are an employee and all your income is taxed under PAYE.
The only exception to this rule is where you have grounds for asking for the tax return to be withdrawn.
If you have received a tax return or not received a tax return, but think you need to complete one. We can help you.
Sandn Accountancy – Expertise to help you Succeed ™
Sandn Accountancy is a Chartered Management Accountancy firm we use HMRC approved software to:
- Complete your tax return
- Calculate your final tax liability
- File the return online
- Liaise with you on the amounts to be paid and when they are due.
In addition to this we can analyse your self-assessment tax return to see if any tax savings can be made and we can also review the form to see if there are any anomalies that need to be addressed before the latest tax calculation is submitted. This process helps to minimise your risk of a HMRC inquiry into your tax affairs.
Sandn’s experienced qualified team of accountant will be able to assist you to complete your tax return. We will provide you a free initial consultation to discuss with your circumstances and to advice you on the opportunities to take advantage or to avoid risk of tax investigation due to latest change in the tax rules.
Using the online verification, approval and sign off facilities Sandn can provide you speedy response and we submit all tax return using HMRC approved system to avoid unnecessary delays. Due to these investment in latest virtual technologies not only we will be able to help the local clients we also will be able to help client throughout UK or overseas.
By giving you a fixed, competitive price and, provided that you can supply the information within a reasonable time scale, we can take the worry away when it comes to self-assessment tax returns, allowing you to concentrate on running your business or enjoying additional leisure time.