MSE News

Almost a million taxpayers risk a £100 fine for filing their self assessment tax return late, so act soon.

The deadline to send completed online forms for the 2010/11 financial year is 31 January. The fine for missing the deadline is £100. And if you've yet to get a log-in to file online, you need to do so by 22 January.

In previous years, you were only fined if you were late AND owed tax, meaning you could make a payment to avoid the fine.

Now, you'll be fined if you're late whether or not you owe anything.

Around 9.5 million people need to submit a self assessment form. HM Revenue and Customs (HMRC) says 10% tend to be late.

The deadline to file by paper passed on 31 October 2011.

Hurry if you've yet to register online

To file online you first need a log-in. If you've had one for previous years, this will still be valid.

To register for the first time, go to the HMRC website.

It takes up to seven working days to register, so the cut-off to be sure of doing so in time is Sunday 22 January.

Who needs to file a return?

If you were sent notification that you need to submit a self-assessment form, then you must do. This mainly applies to the self employed, company directors and anyone with savings or investment income of £10,000 or more.

Those whose tax is deducted by their employer usually DON'T need to submit a form unless they receive additional self employed income from a second job or freelance work.

If you only earned small sums of extra cash or you're a higher rate taxpayer who earned less than £10,000 from savings or investments you need to declare this on a P810 form but the 31 January deadline does not apply here.

If you need a form or you are in any doubt, contact your tax office.

When must I pay by?

The deadline to pay any outstanding tax from the 2010/11 tax year is also 31 January. If late paying, you'll face annual interest at 3% on missing payments.

For the first time, most who make a bank transfer to pay their tax can do so right up until the evening of 31 January.

This is because HMRC now accepts money under the 'Faster Payments' regime which allows cash to go through in two hours.

However, each sending bank has a limit on how much you can transfer under Faster Payments. The limits range between £5,000 and £100,000. See this link for each provider's limit.

What must I pay?

As well as 2010/11 tax, most self assessment payers must also pay the first half of what's called a 'payment on account' for the 2011/12 tax year by the same date.

This will be half the total tax owed for 2010/11. So if you owe £2,000 for 2010/11, the first payment on account will be for £1,000.

The next half (£1,000 in the example above) must be paid by 31 July, and come 31 January 2013, you'll settle the current year's tax bill, as you're doing now for 2010/11.

You only have to make payments on account if your previous year's tax liability was over £1,000.

But if an employer (if you have more than one job) deducted more than 80% of that figure you won't owe a payment on account now but must pay the full sum for 2011/12 by this time next year.

What expenses can I claim?

For the self-employed, you only pay tax on profits after legitimate expenses, so claim back all you're entitled to (see the Revenue's allowable expenses).

What if I'm owed tax back?

After filing, it may be you're due cash back. This may happen if you've only worked part of the year or owe less than the total payments on account you've made for 2010/11. See the Revenue's refund forms for help claiming back.

What if I've yet to register for self assessment?

This is different to registering to use the online service. This is where you tell HMRC you are self employed or you need to file a self assessment form.

You must tell HMRC by the 5 October after the tax year in which you realised you need to file a self assessment form.

So if you become self employed during 2010/11, became a company director in that time or earned over £10,000 from savings or investments you should have told HMRC by 5 October last year.

If not, you could face a penalty of up to 100% of the amount of tax due, in addition to having to pay that tax.

The severity of the penalty depends on whether HMRC believes you deliberately failed to inform it. Where you have a reasonable excuse there may be no penalty.

See the HMRC website to register for self assessment.

Where can I get free help?

You can ask HMRC for advice, while there are also a host of charities and agencies that give help completing forms, especially for those on lower incomes. See the Free Tax Help note.

Comment/Discuss

Discuss this MSE news story: Self assessment deadline

Read more news on...

• HMRC
• Income tax
• Tax
• MSE News Homepage

Bookmarks