It’s that time of year again when people have to do what they have been putting off for the last 9 months – complete their tax return. Not many people like form filling and paperwork, but unfortunately it is one of those things that must be done if you are self employed. If you are thinking of putting off completing your tax return, please read these 3 reasons why you shouldn’t:

1. If you are self employed you have to submit a tax return online to HMRC by midnight on the 31st January
2. If you miss the deadline the longer you delay submitting the return, the more you’ll have to pay in fines (see below). Even if you don’t have any tax to pay you will still be fined for missing the deadline.
3. If you are also employed, subitting your tax return allows HMRC to make sure that you are on the correct tax code for the following year, which could save you tax.

 

Penalties for Late Filing

 

• 1 Day late = £100
• 3 Months late = £10 for each following day – up to a 90 day maximum of £900. This is as well as the fixed penalty above.
• 6 Months late = £300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.
• 12 Months late = £300 or 5% of the tax due, whichever is the higher. In serious cases you may be asked to pay up to 100% of the tax due instead. These are as well as the penalties above.

Ignorance is not an excuse

As you can see, failure to submit a tax return on time (even if you don’t have any tax to pay) could result in a fine of up to £1,600.

 

If you are unsure about completing the return, contact somone ASAP who will be able to help you. Paying someone a fee for completing the return on your behalf is surely better than receiving a fine from HMRC…