If you are required by HMRC to fill in a self-assessment tax return, you need to make sure than this return correctly discloses all taxable income sources. This tax return determines your income tax, NIC and capital gains tax liability for a tax year. You will wish to make sure that all valid tax deductions are claimed. Individuals need to complete and file a self-assessment tax return if they:
- earn more than £2,500 from renting out property.
- have a partner who receives child benefit and either has an annual income of more than £50,000, the so-called higher income child benefit charge.
- are self-employed sole traders.
- employees claiming expenses in excess of £2,500 per tax year; or have an annual income over £100,000.
- are limited company directors.
- earned more than £2,500 in other untaxed income, for example from tips or commission.
- are shareholders.
When is the self-assessment deadline?
The deadline for self-assessment returns is the 31 January following the 5 April end of the related tax year.
What do you need to declare?
When filing your self-assessment tax return, you will need to declare any income that you made in the previous financial year. These will vary depending on your individual circumstances, but the main records you will need to declare are:
- 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 any bank interest
- Dividends or sale of stocks and shares
- Any capital gains made
- Information on any pension you may have
- Disposals e.g. if you sold a property
- Charitable donations
- Rental Income
- Foreign Income
HMRC will issue an immediate £100 fine if you submit your tax return late. This then becomes a fine of £10 on top of this £100 if you fail to submit your return after three months. The maximum fine is £900.
Submission after the Deadline Fine
One Day Late £100
3 months £10 a day up to £900
6 months £300 or 5% of tax due
12 months £300 or 5% of tax due
There are also fines in place for sending an incorrect tax return or if it contains mistakes. Penalties are high for those who attempt to conceal their income in order to pay less tax.
Top mistakes tax payers make when completing their self-assessment tax returns
Making mistakes on self-assessment tax returns however innocent can lead to enquiries, investigations and additional tax, interest and penalties.
Below are some of the top mistakes many people make:
- Not including income or benefits from a previous employment that ended part way through a tax year.
- Forgetting to include student loans when your earnings exceed the threshold
- Not including child benefit clawback for earners who are receiving child benefit and who earn more than £50,000
- Ignoring tax codes and forgetting tax underpayments from previous years collected through their tax code
- Claiming for expenses that cannot be claimed for
What support do we offer?
The best way to ensure that your tax return is completed correctly is to speak to our tax experts who can ensure everything is accurate and submitted in a timely manner.
Understanding this complicated tax system and paying the correct (minimum) amount of income tax, at the correct time, through the correct mechanism, is what most clients seek. Speak to our tax technicians and put your mind at ease. We may even be able to suggest ways to restructure your affairs to save further tax.
I have always found Whiting & Partners helpful, reliable and always willing to discuss problems and advise on the best procedure.