Around 11 million people are required to submit a tax return each year. Tax returns must be filed electronically by 31st January 2019 in order to avoid being issued with an automatic filing penalty. Despite this, around 4.8 million people (44.8%) left it until January to file their tax returns last year.
In this article, we take a closer look at the self assessment filing deadlines and raise some important issues that you should be aware of. If you don't want to start the New Year with a nasty surprise, read on...
Already filed your tax return?
If you have already filed your tax return, don't forget you need to pay any tax due by 31st January 2019. If you are late paying your income tax, interest will be charged and surcharges will apply once payment is 28 days overdue.
In addition, if your tax bill is over £1,000 you may be required to pay instalments for next year too. These are called Payments on Account and they are payable in January and July. Each payment is normally half of the previous year's tax bill so can put an immense strain on cashflow in January when you are already having to find the money for the current year's tax bill.
If your tax return is still outstanding
If you are completing your own tax return, HM Revenue & Customs' (HMRC) online filing system can calculate your tax liability for you. But needless to say, it will not check whether your figures are correct or that you have claimed your full entitlement to expenses, reliefs and allowances.
Furthermore, HMRC's helplines will only deal with 'simple' queries such as questions surrounding PAYE coding notices or the Marriage Allowance. They do not offer tax advice.
If you instead decide to use your local TaxAssist Accountant, they take care of all your tax affairs for you – from registration with HMRC, to completion of the tax return, to calculation of your tax liability and the due dates. They will make sure your affairs are as tax efficient as possible too. So if you are using an accountant, the main thing you need to do is make sure you get your records to them in good time and give them as much information as possible.
Whether you are doing your own tax return or using an accountant, these are a few of the key points taxpayers should be aware of:
The time has passed for paper tax returns
There is the option to file your tax return on paper, but the filing deadline for paper 2017/18 tax returns was 31st October 2018 and has already passed.
If you were to submit a 2017/18 tax return in hard copy now that the paper tax return filing deadline has passed, HMRC would treat this as the late filing of a paper tax return. As a result, HMRC would issue you with an automatic late filing penalty soon after January 2019 deadline.
Getting ready to file your tax return online
If you are doing your own tax return be aware that it takes some time to get registered with HMRC; both in terms of informing them that you need a tax return (because you’re newly self-employed for example) and also to obtain online access to HMRC’s website to file your tax return electronically. So it’s really important that you factor in some processing time.
Remember, contrary to popular belief, HMRC will not necessarily send you a tax return to complete – it is your responsibility to register for Self Assessment if necessary.
Out of time? Use an accountant
If you are doing your own tax return and are concerned your online access to the HMRC website won't be active in time to file before 31st January, an accountant or tax adviser should be able to file your tax return for you via their special agent logins with HMRC.
Please note that you will need your Unique Taxpayer Reference (UTR) though.
Don’t leave it until 31st January
The more time you leave yourself to prepare your tax return, the better. This should reduce the risk of errors and mistakes being made, which could not only be costly, but could also mean that you end up having to re-do your tax return.
Last year, the busiest days for filing were 30th and 31st January, when HMRC received 1,290,948 tax returns. The busiest hour was between 4pm and 5pm on 31st January, when 60,596 tax returns were received – a staggering 1,010 per minute.
According to HMRC statistics published last month, the average wait for your call to be answered is over 5 minutes but more than 19% of calls are taking more than 10 minutes to speak to a HMRC adviser. The statistics covered October 2018, so there’s a good chance the wait has increased since then.
So don’t leave your tax return until the final day, as HMRC’s website and call centres will be under tremendous pressure.
The consequences of filing your tax return late
A late tax return is subject to the following penalty regime:
- An initial £100 penalty, which will apply even if there is less than £100 tax to pay or the tax due is paid on time
- After 3 months, additional daily penalties of £10 per day - up to a maximum of £900
- After 6 months, a further penalty of 5% of the tax due or £300 – whichever is greater
- After 12 months, another 5% of the tax due or £300 – whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due
Each of these penalties is in addition to one another, so a tax return filed a year late could face penalties of at least £1,600 - and this could escalate depending on the level of tax due.
Can't pay your tax bill?
Any tax due for 2017/18 is also due by 31st January 2019. If you cannot afford your tax bill, you should still file your tax return in order to avoid the late filing penalties detailed above.
If you have missed the payment deadline, you (or your accountant if you're using one) should contact HMRC to see if a payment plan or extension can be agreed.
Penalties are a waste of your hard-earned cash and you do not get tax relief for them either.
We can help
At TaxAssist Accountants we pride ourselves on helping you take care of all your tax affairs: from registration with HMRC and completion of your tax return, to calculating your tax liability and due dates.
So don't delay, contact us today to find out more about what we can do for you on 01934 429663.
By Jo Nockels FCCA
Last updated January 2019
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.