The deadline is fast approaching for self assessment tax returns
THE OPPORTUNITY to submit a paper tax return to HM Revenue and Customs has already passed, and we are fast approaching the deadline for submission of digital returns. In order to ensure you don’t incur any penalties, you must make the submission by January 31, 2017.
What do you need to be able to submit a digital return?
You must be registered with HMRC and have a Unique Taxpayer Reference (UTR) to submit your tax return online. It can take more than seven working days if you are in the UK and up to 21 days if you are abroad to receive your activation code through the post, so there is urgency if you need to make a return and have yet to register.
What do you need to declare?
When you file your return, you will need to declare any income that you received in the tax year to April 5, 2016. Each individual will be different in terms of their sources of income, gains and allowable deductions. However, below are the main sources of the information to complete your return and declare the income and gains your are required to declare: • Your P60 • Your P45 (if you left a job that year) • P11D benefits in kind • Details of any pay and expenses from an employer • Details of bank interest • Dividends from public and private companies • Any capital gains made, be they from shares or property • Information on any pension you may have • Income from trusts • Charitable donations • Rental income • Foreign income • Chargeable gains made on insurance policies or bonds
What fines are there?
If you submit your tax return late, there is an immediate £100 fine payable to HMRC. If you fail to submit your tax return after three months, this becomes a £10 a day fine on top of the £100, which grows to a maximum of £900. If you still haven’t filed your return after six and 12 months following the deadline you get an additional £300 fine, or five percent of your tax bill. Yes, you can appeal the fine, but your excuses have to be valid and hold up to scrutiny.
Payment of tax
The balancing payment for the year to April 2016 and the first instalment of tax for 2016/2017 is January 31, 2017. My experience is that for some taxpayers, the bill will be unexpected and they will be unable to pay immediately, risking interest from the due date of a five percent fine if the tax is not paid within 28 days. This increases by another five percent if still unpaid by August 1 and another five percent if 12 months late. If you have a genuine problem in paying the tax, contacting HM Revenue and Customs is always a sensible idea.
“Each individual will be different in terms of their sources of income, gains and allowable deductions”