January 31st is the deadline for those who need to submit a self assessment tax return. Mitchell Charlesworth’s tax experts have put together the following guide for those individuals who still need to submit a tax return to HMRC.
Our objective at Mitchell Charlesworth will always remain to help you submit your tax return efficiently and to reduce any anxiety levels as far as possible.
For more information, or to find out how our tax team can help you meet your tax responsibilities, do not hesitate to contact us.
Tax Return Deadlines
Firstly and most importantly, if you have to send in a Self Assessment tax return and make payments then your online tax return must reach HMRC by midnight on 31 January following the end of the tax year. So, for example, the tax return for the year ended 5 April 2023 must be submitted online by midnight on 31 January 2024.
One of the few exceptions to this rule is if HMRC sends you a letter after 31 October telling you to complete a tax return for the tax year just ended. In this instance, the letter will tell you the deadline – it is usually 3 months from the date of the letter.
There’s also an earlier deadline of 30 December if you want HMRC to collect any tax you owe through your tax code. You can ask for this if you owe less than £3,000.
Should you choose to send a paper tax return, it must reach HMRC by midnight on 31 October following the end of the tax year.
Do I need to complete a tax return?
Self assessment tax returns are for those individuals who do not have straightforward tax affairs. That is, you are self-employed or have income above a certain level. Those individuals who have straightforward tax arrangements will simply pay tax already through PAYE (Pay as You Earn).
The most common reasons that people need to fill in tax returns:
- You are self-employed (or a partner in a partnership)
- Your annual income is more than £100,000
- You have income from savings, investment or property:
- £10,000 or more from taxed savings and investments
- £2,500 or more from untaxed savings and investments
- £10,000 or more from property (before deducting allowable expenses)
- £2,500 or more from property (after deducting allowable expenses)
- You have income from trusts, settlements and estates
- You are a trustee
- You have capital gains tax to pay
- You need to claim reliefs or expenses
- you get income from overseas
- you have lived or worked abroad or are not domiciled in the UK
- you are a company director, minister, Lloyd’s name or member
- You or your partner receive Child Benefit and your income is over £50,000:
The High Income Child Benefit tax charge was introduced on 7 January 2013 and may mean you need to complete a Self Assessment tax return. You must complete a tax return if all of the following apply:
- your income is over £50,000 a year
- you live with a partner and your income is higher than theirs
- you or your partner are entitled to receive Child Benefit (or get an equivalent amount from someone who claims Child Benefit for a child who lives with you)
- you jointly decide to keep receiving Child Benefit and pay the new tax charge
Registering for self assessment
Before you complete your first tax return you need to register for Self Assessment. Once you have registered, HMRC will set up the right records for you that will ensure you pay the right amount of tax and National Insurance.
When should you register?
The latest you should register is by 5 October after the end of the tax year for which you need to complete a tax return i.e. by 5 October 2023 for the tax year ended 5 April 2023.
In order to register you will need the following information:
- Your contact details
- Your business’s contact details (if you have started self-employment)
- Your National Insurance number
- The date your circumstances changed
- Your 10-digit Unique Taxpayer Reference (if you have previously completed a tax return)
Where you register for self assessment depends on your specific circumstances. Links to the relevant section for you can be found here: Register for Self Assessment: Overview – GOV.UK (www.gov.uk)
If you have previously submitted a tax return online in the previous year, HMRC will not send you a paper tax return. If you have opted to receive digital communications then you will be prompted by email to check your self assessment online account for your Notice to File letter.
What records should you keep?
In order to complete a Self Assessment tax return as an employee, pensioner or company director then you will need to keep various records. You will also need to refer to these documents should HMRC have any questions about returns you have completed. Our standard checklist can be found HERE, with further details summarised below.
- 1. Income from employment documents
- 2. Records of any expenses
- 3. Capital Gains Tax records
- 4. Income from property
- 5. Pension records
- 6. Benefits records
- 7. Interest, dividends or other income from UK savings, investments or trusts
- 8. Foreign income or gains
- 9. Income from employee share schemes or share-related benefits
Penalties – What happens if you miss the tax return deadline:
Should you miss the tax return deadline, then you should still strive to get your tax return in as soon as possible as the longer you delay submitting, the more in penalties you will have to pay.
The table below shows the penalties you’ll have to pay if your tax return is late. If a Partnership tax return is late, each partner will have to pay the penalties shown below:
- 6 months late
- 12 months late
- 12 months late and the tax payer is found to be deliberately withholding information
- 5% of tax due or £300, whichever is greater
In serious cases you may be asked to pay up to 100% of the tax due instead. In some cases the penalties can be even higher than this.
These are as well as the penalties above.
Penalties – What happens if you cannot pay the tax you owe:
It is important that you pay the tax you owe for the previous tax year on time otherwise, in additional to daily interest charges being imposed, you will have to pay 5% late payment penalties on any amounts outstanding 30 days, 6 months and 12 months after the due date.
You may find once you have calculated your amount of tax due that you cannot pay in full and on time. If this is the case then you may consider:
- approaching your bank/building society to see if they will support you through the short term difficulty
- looking at your outgoings to see if there is any non-essential expenditure that you can stop or reduce
- approaching people that owe you money to see if they can pay you more quickly
If you are still unable to pay after considering these options, you should contact HMRC’s Business Payment Support Service Helpline on Telephone 0300 200 3835 as soon as possible.
HMRC may allow you time to pay. However, if you delay contacting HMRC until after the due date, you will be charged interest and you may also be charged a penalty or a surcharge.
What counts as a ‘Reasonable Excuse’ to miss the Filing Deadline?
If you do fail to file your tax return on time, without a ‘reasonable excuse’, then you could be liable for a late filing penalty. However, if you do believe that you have a reasonable excuse then you may be exempt from paying the late filing penalty. Generally, a ‘reasonable excuse’ is when some unforeseeable or unusual event beyond your control has prevented you from filing your return on time.
HMRC lists the following as reasonable excuses for filing late returns:
- a failure in the HMRC computer system
- your computer breaks down just before or during the preparation of your online return
- a serious illness, disability or serious mental health condition has made you incapable of filing your tax return
- a fire, flood or theft prevented you from completing your tax return
- postal delays that you couldn’t have predicted
- delays related to a disability you have
Each case will be examined on its merit and HMRC will still expect you to have done everything in your power to submit your return on time.
HMRC will not accept an excuse where you haven’t made a reasonable effort to meet the deadline. For example, if you:
- found the online system too complicated to follow
- left everything to your accountant to do and they let you down
- forgot about the deadline (even if you didn’t get a reminder from HMRC)
- did not try to re-submit your return on time once a problem with the IT system was put right
- registered for HMRC Online Services after the filing deadline
If you think you have a reasonable excuse for filing late, then you should contact HMRC immediately, especially if you have been charged a late filing penalty and need to appeal against it.
More details about appealing against late submission penalties can be found on HMRC’s website here: https://www.gov.uk/tax-appeals/reasonable-excuses
More details on all of the information above can also be found on HMRC’s website: https://www.gov.uk/topic/personal-tax/self-assessment
The details above have been published in line with the Crown Copyright regulations.
For more information, or to find out how our tax team can help you meet your tax responsibilities, please contact our specialist tax partner:
Written 20 February 2018 (Updated June 2023)