October – Harvest Festival, Hallowe’en and the deadline for filing your paper self-assessment tax return!
HMRC must receive your paper tax return for the 2014/15 tax year by 31st October 2015. Postal delays will not be considered a valid excuse! There is an automatic £100 fine for late submission, but you can avoid this by simply filing online instead. The deadline for filing online tax returns is 31st January 2016.
Registering for self-assessment
Before you can actually file a paper self-assessment tax return, you must register with HMRC by 5th October. If you miss this date then you should call HMRC straightaway to explain and, hopefully, avoid a penalty.
If you do not register when you should, then you face a substantial penalty that is worked out as 100% of the tax you owe.
It is your responsibility to register with HMRC if you are;
- Not permanently resident in the UK or you have worked/lived abroad
- Receiving income from estates, settlements or trusts
- Paying capital gains tax
- A trustee, a company director or in a business partnership
- Earning £100,000+ per year
- Getting income from overseas or property in the UK
- Intending to claim tax reliefs for work related expenses
- Receiving child benefit payments (or your partner is) and you earn over £50,000 per year
- Self-employed
- Receiving income from investments or savings worth more than £2,500 which hasn’t been taxed.
- In possession of investment or savings income that was to the amount of £10,000 before you paid tax on it.
- You have a second job which earns you extra money, including freelance work.
Notifications from HMRC
HMRC also send out notifications to taxpayers they know need to file a self-assessment tax return from April 2015. If you receive such a notification then you are obliged to complete a return. If you think a mistake has been made then you need to take it up with HMRC as soon as possible.
SA Online Filing
You may be much more comfortable with the traditional paper filing system, but if you do run out of time don’t waste £100 on late filing, just file online instead. It’s the same information, just on screen. You get until 31st January 2016 for this deadline.
Important note!
There is an important security step in the online filing process that you need to be aware of. To complete your initial registration, you go to the relevant section of HMRC’s website and then you must wait for them to send you an ‘activation code’ in the post before you can continue with your submission. This can take up to 10 working days, so it’s important to factor this in to your timings.
If you have filed online before, then your previous log in should be active.
Making Payments to HMRC
- You can now pay by bank transfer and use the 2 hour transfer ‘faster payments’ system. Do check your own bank’s upper limit for transfers though, it varies form £5,000 to £100,000.
- You pay off your tax bill in two amounts called ‘payment on account’. The easiest way to explain is with an example.
You owe £3.000 for the 2014-15 tax year.
1st instalment – pay £1,500 by 31st January 2015
2nd instalment – pay £1,500 by 31st July 2015
- Late payments start to amass interest at the rate of 3%. There is an automatic £100 fine for missing any deadlines.
- If you are unable to afford your tax bill then you need to talk to HMRC as soon as possible. They might be able to organise staggered payments that are more spread out. You should also hopefully avoid being charged for late payments.
- HMRC may actually owe you! If you owe less than the total payments on account you made for the previous year, or you only worked for part of the year, then HMRC can give you the correct forms to apply for a refund.
- If you are self-employed then your tax is worked out on your profits, but only after any expenses have been deducted. So make sure that you are making all of the tax relief claims you are entitled to!
Tony Shanks