As we edge ever closer to the start of the new year, the days are starting to run out for submitting your self-assessment tax return.
If you haven’t done it by now, you’ll need to ensure you have everything filed and submitted before midnight on 31 January. Failure to do so risks fines and even an investigation.
Here’s why you should submit your self-assessment now.
Missing the deadline
As mentioned, if you leave submitting your self-assessment until the last minute, you run the risk of receiving late penalties, which increase the longer you leave it past midnight on 31 January.
Missing the deadline by one day will result in an automatic £100 penalty. If you miss the deadline by three months, you might have to pay a penalty of £10 a day for a maximum of 90 days.
If you miss the deadline by six months, you might have to pay a further penalty of 5% of the tax you owe, or £300, whichever is greater.
Twelve months past the deadline will incur a 5% penalty of the tax you owe, or £300. Sometimes, you may have to pay up to 100% of the tax you owe.
It’s one thing to miss the deadline, but if you rush your self-assessment and make any errors, you could be penalised for that too.
If there are any mistakes, HMRC will have to determine whether you’ve taken reasonable care when submitting your return. Any penalties issued for errors are based on the tax you owe and are payable in addition to whatever is outstanding.
If you’ve taken reasonable care when submitting your return, you’ll have no penalty to pay. Anyone found to have been careless when filing their return could receive a penalty between 0% and 30% of the extra tax owed.
Deliberately underestimating your tax and any attempts to conceal it can result in a fine between 30% and 100% of the tax owed.
If you realise you have made a mistake, you can correct your return for up to a year after the deadline on the HMRC portal. At this time, you’ll have to write to HMRC to explain the circumstances and the reason for the changes.
Lessen risk of investigations
Although HMRC can launch an investigation into your taxes at any point, the chances of it happening due to late submission or errors on your return do increase.
An investigation happens to make sure you’re paying the right amount of tax. HMRC can hold a full enquiry and cross-reference all of your returns against your personal and business data.
The harshest penalties are given to those who are found to be deliberately hiding income or inflating costs to reduce tax liability.
While you may be doing everything above board, an investigation is still a stressful prospect to consider. To take the strain off your shoulders, we offer a fee protection service which covers you against the cost of a full enquiry by HMRC. We’ll provide you with constant support and advice on tax investigations so you won’t have to suffer alone.
Don’t ignore your self-assessment
Although the deadline is looming, you still have time to get your self-assessment filed and submitted before midnight on 31 January. If you need any help with your self-assessment, we’re here to help.