What is Self assessment?
Self assessment is the system HM Revenue and Customs use to collect Income tax from people who are not eligible to have it deducted at source. This could be due to self-employment, a second income from property or pension payments to name but a few.
If you are self employed or have income which cannot be taxed under PAYE then self assessment needs to be registered for before the 5th October of the tax year in which the untaxed income is received.
Self assessment deadlines
Once registered the annual deadline for filing a return is 31st January if using the online service (paper returns need to be received by HMRC by 31st October)
What happens if you miss the deadline?
Failure to file on time results in a £100 fine plus interest charged on any tax owed. You will receive a fine regardless if any tax is due or not. If your return has still not been filed 3 months later (by the end of April) then HMRC can impose an extra £10 daily fine for the next 90 days thus raising the penalty to £1000.
Further penalties can be imposed after 6 months and 12 months; these are usually dependent on the amount of tax owed to HM Revenue and Customs.
Can the penalties be appealed?
You can appeal against the penalties using the online system or a S8370 form. If you have a reasonable excuse HMRC will waive the fine but it is down to the officials’ discretion.
If you have missed the deadline then you need to get your return submitted as soon as possible as the fines and penalties will keep building. Further information can be found on HMRC’s website or you can speak to an accountant like AJR & Co Ltd for more specific advice.
Download our free checklist to see exactly what information is required for self assessment.