With the new school year having started and everyone returning from summer holidays we are drawing our attention to the next six months and the requirements for self assessment returns that are looming.
If you have a requirement to prepare a self-assessment tax return for the year to 5th April 2018 and haven’t already done so this is now a good time to get your affairs up to date.
Initially if you haven’t yet registered with HMRC to tell them you need to prepare a tax return this should be the first step. This is something you can do online through HMRC’s website, creating yourself a government gateway ID and personal tax account.
If you have self-employed income from business activities you would need to collate all the activity for the year to 5th April 2018 along with any other income or gains you may have. If you started business part way through the tax year and had employment before this, you will need to have your P45 to hand to include the details onto the tax return along with the business details. Similarly, if you have run a business alongside any employment you will need to enter the P60 details. The tax return must represent all taxable income and gains for the whole year.
You can file your tax return in paper format which has a deadline to be with HMRC of midnight on 31st October 2018.
Online tax returns must be submitted by midnight 31st January 2018. If you miss these dates filing penalties will be imposed. Returns that are filed late attract an automatic £100 late filing penalty and these increase if the Return is more than 3 months late.
In some instances, if the tax you owe is less than £3000 and you also have employment income that is taxable you may be able to have the tax deducted through your wages. To apply for this your return must be with HMRC by 30 December.
The tax due for the year is also payable by 31st January, if paid late there will be interest charges applied to the balance unpaid.
If you are not able to pay your tax bill by the due date of 31 January 2018 the worst thing to do is to ignore it. In our experience it is much better to contact H M Revenue & Customs and agree a payment plan rather than ignoring them and waiting for the debt collection letters to arrive.
If you use an accountant to prepare your tax return and haven’t yet sent the information over to them, we would recommend doing this as soon as possible to allow them plenty of time to prepare the figures for you and give you as much notice as possible of the tax payable.
In summary, our message is do not delay!