Self Assessment. It doesn’t need to be two of the scariest words in the financial year.
You know every year it needs doing by the end of January, but you just keep putting it off. Suddenly Christmas has flown by and you’re rushing around finding receipts.
You’re not the only one procrastinating. In 2018, 2.6 million people (nearly a quarter of those due to file) had still not filed their return by the 29th January, leaving them just two days to beat the January 31st deadline.
It’ll be no surprise to you that deadline day is the single busiest day for filing Self Assessment Returns with HMRC. More than 6% of returns due in 2018 were filed in the final 24 hours on 31st January. With a similar amount missing the deadline entirely. Every year HMRC collects millions in fines for those filling late.
Even HMRC itself has a history of issues around deadline day, including staff strikes and online service problems too.
With all of this mind, it makes complete sense to file early! Still not convinced? We’ve given you 5 great reasons to not leave it until the last minute!
It takes time to register with HMRC
Registering with HMRC takes time. To be able to submit your Self Assessment, HMRC needs to be expecting a return from you.
How long it takes to register really depends on the time of year. “Off peak” times can take a couple of weeks, but if you wait until the January rush, it can take much longer!
There are two stages to registration. First, you need a Unique Taxpayer Reference (UTR), which is sent to you in the post. You use your UTR to register for HMRC Online Services.
Secondly, HMRC will send you a PIN number in the post to access Online Services where you can file your Self Assessment. This arduous process should become simpler when HMRC rolls out online tax accounts, but for now, you’re reliant on Royal Mail and HMRC to get registered.
If you need to register with HMRC, you can do this online here.
Gives you the time to save for your tax bill
Although you may choose to file your Self Assessment early, your tax bill payment still isn’t due until January 31st. If you file by the end of July then you’ll have a full six months to budget for any tax you owe.
However, if you file in January but find you don’t have enough money to actually pay your taxes, you’ll be in line for one of HMRC’s famous on-the-spot £100 fines!
Avoid fines & penalties
Filing early will not only make sure you avoid the instant missed deadline fine, but also give you time to address any problems or disputes.
The current penalties are:
- A £100 instant fine if you miss the January 31st deadline
- £10-per-day fines (for up to 90 days) if you haven’t filed by 30th April
- A £300 fine (or 5% of the tax you owe – whichever is greater) if you still haven’t filed after another 90 days
- Another £300 fine (or 5% of the tax you owe – whichever is greater) if you still haven’t filed within a year
- Additional penalties – including up to 100% of owed tax – if HMRC believes you are intentionally delaying your filing.
You can use HMRC’s online calculator to get an estimate of how much you’ll need to pay in penalties and interest if you’ve missed the deadline for submitted & paying your Self Assessment.
You might be surprised
For those Self Employed people that make payments on account (two payments to HMRC each year in January & July), by completing your Self Assessment prior to July, you could find that the July liability reduces! This is particularly true if in circumstances where taxable profit reduces.
Some business owners might even be owed a tax refund! Using this cash can often be really helpful to you and your business. You could buy new equipment, pay off some debt or maybe pay it into a pension. Now isn’t that worth the effort of getting your Self Assessment submitted early?
We take the pain out of Self Assessments
Whether you are self-employed, a director of a limited company or have another income; you are required to complete a HMRC self-assessment tax return for each tax year.
We will take the pressure from your shoulders, prepare the self-assessment tax return, present this to you in full (jargon-free!) and submit and liaise with HMRC on your behalf.
Our initial consultation is free of charge so why not give us a call, drop us an email or interact with us on social media to book a time to have an informal and jargon-free chat about how we may be able to support you with your next self-assessment tax return – early!
Thanks for stopping by,