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Self Assessment Income Tax Returns

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HMRC have mailed over 10 million letters to submit a 2022/23 self assessment income tax return. But individuals are running-out of time to file their 2022/23 tax returns, which are expected to be submitted by 31st January 2024.

A lot of people wish to take days off to check out the Christmas period; nevertheless, citizens must always be motivated to get their particular tax issues in order in good time. Abandoning your tax matters to the eleventh hour can result into unwanted anxiety, could result to penalty charges and interest and if something is incorrect or incomplete, you have almost no time to sort out problems.

Setting up with HMRC and Submitting your income tax return

Any kind of outstanding tax returns must be submitted online now, as the due date for the paper tax return of 31st October 2023 has now elapsed. Paper tax returns accepted by HMRC from 1st November 2023 forwards will instantly be given with a £100 penalty. And this penalty charge will apply even if there is no tax to pay or it is settled on time.

HMRC circulated a press release to advise citizens of the due date, and significantly, advise all of them to enroll for online filing as soon as possible, due to the fact it can take up to 10 days to obtain your Activation Code. Still in case you have submitted online in the past, make sure that you have actually your User ID and security password, as it can take up to 10 days to obtain a substitution.

Despite the fact that the due date for submitting self-assessment tax returns is 31st January 2024, individuals should abstain from abandoning it right until the last minute as HMRC’s webpage may encounter extreme user volumes close to the due date. Last year, more than 600,000 income tax returns were submitted online on 31st January 2024.

On the other hand, you could possibly authorize an accounting firm to manage your matters on your behalf. By authorising an accounting firm, they will be capable of submitting your tax return using the internet if they are listed as a tax agent with HMRC.

Penalty Charges

Up until eventually this year, an automated charge of £100 would definitely be issued for a late tax return. Nevertheless, this could be lowered- possibly even reduced to zero- if you paid your tax by the deadline or the tax debt was less than £100. However, a new penalty routine is applicable to late tax returns this specific year, which is below:

  • A preliminary £100 penalty charge, which will not apply even if there is less than £100 tax to pay or the tax due is settled on time
  • After 3 months, further daily penalties of £10 per day- up to a max of £900
  • After 6 months, an additional penalty of 5% of the tax due or £300- whatever is higher
  • After 12 months, a further 5% or £300- whichever is higher. In severe instances, the fee after 12 months can be up to 100% of the tax expected

Not alone are penalty charges a waste of your precious earnings, you do not get tax reduction for them either. If you choose to use personal tax accountant, not only should penalties and interest be avoided, but accountants may even be able to save or defer your tax.

Payment of Tax

If you are submitting your tax return using the internet, HMRC’s system will immediately determine your tax position for you, but as opposed to an accountant they will not recommend you if you have concluded something improperly, have strayed from accountancy guidelines or tax laws or have missed out on making claims for something.

HMRC are not going to assist you recognize tax savings that you could be making. Do not mistake tax computations with tax relief.

If you are considering to pay tax, this must be resolved by 31st January 2024 equally. Any repayment due should be released by HMRC either by cheque or bank receipt soon immediately after your tax return has been submitted. Please bear in mind of the many tax return electronic mail frauds that circulate at this time around of year.

An instalment on account (POA) might also be expected on 31st January 2024. POAs are obligations made by the taxpayer upfront to cover their tax burden for next year and are due in January and July. They are created to reduce cash flow and each of them is usually half of the last year’s tax liability – even though they can be lowered. POAs are only expected where your tax liability is considerably more than £1,000, or less than 80% of your tax bill is met by tax taken off ‘at source’ (i.e. before you receive the income)– such as PAYE on employment earnings or the tax deducted from bank interest.

For those setting out or hoping to plan their cash flow for upcoming years, it is recommended to put away about 20% to 30% of your revenues during the year to deal with your tax obligation. Savings of this degree should guarantee that most, if not all, of your tax bill, will be secured.

Interest

If you pay your tax late, HMRC will charge you interest on the amount past due. New charges can also be implemented for paying your tax late, which are:

  • 5% of the tax overdue after 30 days
  • An extra 5% of the tax overdue after 6 months
  • An additional 5% of the tax overdue after 12 months

Using a tax advsior will take away the anxiety of filing tax returns and allow you to focus on operating your company. Not merely should penalty charges and interest be definitely avoided, but chartered accountants may even have the option to save or delay you tax. They can also keep you updated of your tax situation and abreast of any changes in the tax routine.

Disclaimer: The important information made available is dependent on present guidance (at date of publication) from HMRC and may be dependent on change. Any information discussed here is meant to notify rather than recommend. Taxpayer’s situations do vary and if you feel that the facts provided is helpful it is worthwhile that you contact us before application. If you take, or do not take action as a result of reading this content, before obtaining our written recommendation, we will accept no obligation for any monetary loss suffered.

FAQs

Some of the very common questions you may have

A self-assessment tax return is a way to report your income to HMRC and ensure that you’re paying the right amount of tax each year. On the form, you must declare all your income, claim allowances and tax reliefs, and calculate your tax liability. If you’ve paid too much tax, you’ll get a refund, but if you haven’t paid enough, you’ll need to make an extra payment. Completing a tax return can be complicated, so many people get help from accountants or tax advisers. Remember, you must complete your tax return accurately and on time, or you may face penalties and interest charges.

Most people in the UK pay taxes automatically through the PAYE system. However, if you’re self-employed, a company director, receiving income from renting out a property, earning money from savings, investments, or dividends, or have income from overseas, you may need to fill out a tax return. Additionally, those earning over £100,000 or with untaxed income from tips or commission may also need to do so. It’s important to keep in mind that you must fill out a return if HMRC asks you to, even if you don’t think you owe any tax. Be honest, keep good records, and seek help if needed.

The deadline for submitting your self-assessment tax return depends on whether you choose to file a paper return or an online return.

For paper returns, the deadline is usually October 31st, following the end of the tax year. For online returns, the deadline is normally January 31st, following the end of the tax year. If you’re filing online for the first time, you need to register in advance.

Remember to pay any tax owed by the deadline. If you miss the filing deadline, you’ll usually face a penalty. Contact HMRC as soon as possible if you are struggling to pay your taxes on time.

By filing and paying on time, you’re playing your part in keeping the UK’s tax system fair and effective.

Late filing of self-assessment tax returns can result in penalties from HMRC. These penalties are designed to encourage timely filing and can add up quickly. The penalties start from £100 for being a day late and can go up to 100% of the tax due if the return is a year late. Late payment also attracts penalties starting at 5% of the unpaid tax after 30 days. HMRC can start a criminal investigation in serious cases. However, penalties may be appealed with evidence of a reasonable excuse. It’s important to file and pay on time if possible and communicate with HMRC if struggling.

You can make changes to your self-assessment tax return after filing it until January 31st of the following year. To amend, log into your HMRC account and select the tax year you want to update. If you owe more tax, pay it promptly to avoid interest and penalties. If you overpaid, HMRC will refund you. If you need more clarification, seek advice from a tax adviser or accountant. Remember to file accurate returns and correct any mistakes promptly to maintain the integrity of the system.

Having the right records is crucial when completing your self-assessment tax return, as HMRC can ask to see evidence of the figures you’ve reported. For self-employed individuals, keeping detailed records of business income and expenses is essential. You should also keep records of any income from abroad, rental income, investment income, and any charitable donations or pension contributions. Additionally, keeping records of any expenses you want to claim against your tax is important. HMRC recommends keeping your records for at least five years after the submission deadline of the relevant tax return and suggests using accounting software or a simple spreadsheet to keep track of your income and expenses. By keeping accurate records, you’re contributing to a fair and transparent tax system for everyone.

If you can’t pay your self-assessment tax bill, act quickly and contact HMRC’s Payment Support Service. They’ll work with you to agree on a payment plan that you can afford. Remember to file your tax return by the deadline, even if you can’t pay on time. If your business is struggling, you can reduce the payments to your account. In serious cases, consider other options with professional advice. The earlier you act, the more options you’re likely to have.

We offer a range of services to make the self-assessment tax return process stress-free. Our accountants evaluate your tax situation, gather your information, complete and file your return, calculate your tax liability, provide proactive advice, and handle HMRC queries. We can also handle more complex matters like foreign income, capital gains tax, rental income, and self-employment.
At our core, we’re committed to making your life easier. Our top priority is ensuring that your tax experience is as stress-free as possible while also maximizing your tax efficiency. And don’t worry; we take confidentiality seriously so that you can trust us with all your tax needs!

We offer a transparent pricing model for their self-assessment tax return service. After a free initial consultation, they provide a personalized fixed-fee quote based on the complexity of your tax situation and the services you require. Our fees are not the cheapest but reflect the high-quality, comprehensive service we provide. We can help you identify allowances and reliefs, potentially reducing your tax bill and ensuring your return is accurate and filed on time, helping you avoid costly penalties. To get an accurate quote for your self-assessment tax return, get in touch with us today.

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Disclaimer

Our blogs and articles are for information only. If you need help with your specific tax problem or need advice for your business please call us on 0800 135 7323