What is a self assessment tax return?

Self assessment is a system that the HMRC use in order to collect income tax. People and business with other income need to report via a tax return online, the deadline is the 31st of January 2022.

How do I file my self assessment tax return?

You can fill out your self assessment tax return online if you are self employed or, are not self-employed but still send a tax return (because you receive money for renting out a property for example).

The HMRC online service can also be used to view previous returns that you have made, check your details or print your tax calculation.

If you have not previously filed a tax return, you must register for Self Assessment. You cannot file a Self Assessment tax return online if:

  • You are in a partnership
  • It is for a trust or estate
  • You lived abroad as a non-resident
  • To report multiple ‘chargeable gains’ e.g from life insurance

Instead, you must download other forms or commercial software.

What happens if I file my self assessment tax return late?

Typically, if you file your self assessment tax return late you will receive a fine. One day late is an immediate £100 fine, three months late means a fine of £10 each day your return is late – this is capped at 90 days however, when taking into account the initial £100 fine, you could end up paying a £1,000 fine in just three months.

If you are six months late, you will be charged an additional £300 or a 5% penalty will be added to your balance, whichever is higher. Following on from this, if you are twelve months late, you will be then charged another £300 or 5% and in some instances, you may actually be charged up to 100% of the tax you owe.

Failing to file your tax return is not the only thing that can leave you with a fine. Not paying the tax you owe also mean the HMRC will charge you. Any tax owed must be paid by 31st of January following the end of the tax year. The charge on late payments is 3.25% however, after thirty days you will be fined 5% of the outstanding amount.

In 2022 however, the UK government has waived one month for self assessment tax payers and those who need to file in order to help following Covid-19. The deadline still remains the 31st of January however, for business who cannot meet the January deadline, they will not be charged a fine as long as they file by the 28th of February.

How we can help

At Cooper Accounting we help our customers with their self assessment tax returns every year. We are able to help alleviate the pressure, stress and time it can take to complete the process. We may also be able to assist if you have filed late or accrued a late payment penalty.

You may be able to avoid any fines or penalties if you have a reasonable excuse or have registered as self employed and never actually traded. You actually have two years from the filing deadline to de-register, this is when HMRC should remove all penalties and inters relating to any penalties.

Did you know that you can also earn £1,000 per tax year in turnover without having to pay any taxes. This can be classed as casual earning such as selling things on ebay.

If you would like assistance with filing your self assessment tax returns or, have filed late, feel free to reach out to the Cooper Accounting team, we would be more than happy to assist.