Tax return warning: Some UK taxpayers urged to act now before Self Assessment Tax deadline | Personal Finance | Finance
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The Self Assessment Tax Return deadline falls on January 31. While some people may have already filled out the form well in advance of the deadline, others may still have it on their to-do list.
And, while some may be looking to make the most of their various tax allowances prior to the end of the tax year on April 5, certain people may be aware that they have a more immediate priority – of submitting their self-assessment tax return for the 2018/19 financial year.
The final date for filing self-assessment tax returns for the 2018/19 tax year is on midnight on January 31, 2020.
This year, it can now only be done online , as the deadline for submitting paper returns expired at midnight on December 31.
Failure to complete this by even one day will result in a £100 fine.
It then rises by £10 a day to a maximum of £900 by May 1 and continues to ratchet up further thereafter.
READ MORE: Why you could end up paying £100 charge to HMRC even if you don’t owe any tax
Furthermore, if a person has been late the past two years, the penalties for their third consecutive late filing will rise to £500 a day.
Commenting, Gary Smith, chartered financial planner at Tilney, said: “It is very easy to put off things you perceive as boring until the eleventh hour but delaying your tax return could be stressful and risky.
“Filing a tax return does involve some preparation such as tracking down your taxpayer reference, payslips and your annual P60 form, details of dividends and tax credits received, any personal pension contributions made and calculating possible capital gains crystallised on shares or other assets.
“Importantly, to file online you need an HMRC account and if you do not have one you will need to be sent an activation code in the post – so get your skates on if you do not already have an account.
DON’T MISS
“Importantly, any additional tax due will be eligible for payment by January 31, so leaving your return until late in the day might mean you could be hit with an unexpected and possibly sizeable demand with no time to raise the necessary cash which may be in shortly supply after the Christmas credit card bills have arrived.
“There are of course unwelcome penalties for late payment, with a five percent charge on the tax owed for late payment after 30 days as well interest charged at a rate of three percent.
“Those owing less than £3,000 could have avoided the need to make a lump sum payment altogether and settled the tax owed through PAYE had they filed a paper return by October 31, 2019 or on online by the end of December, so it is definitely worth making a note to get ahead of the curve next time.
“Speaking to a financial planner could help get your finances planned for the year ahead and allow you to get ahead of the curve for important deadlines.”
The team at accounting tool Bokio have shared some top tips for the looming deadline.
This includes not waiting until the deadline day falls.
“Underestimating the time it takes to file your tax return is one of the main reasons for missing the January 31st deadline,” they warned.
“Spreading the process over a number of days can help reduce stress, and give you time to address any issues or queries before it’s too late.
“In the long run, you’ll save time and will be more likely to avoid the £100 fine and any interest payments for late submission.”
A person may also want to be aware of what they can and cannot expense.
The Bokio team explained: “There’s no doubt that running a business is a tough job, therefore making sure you’re being as tax efficient as possible is vital.
“Unfortunately, every year many people lose out, simply because they were unaware of the expenses they could have claimed for.
“For example, whilst it’s well known that travel and stationary can be expensed, few people may be aware that staff uniform and clothing can also be claimed.
“To see a full list of expendable items check the official HMRC website.”
Another thing to remember is that it may be better to file the late tax return, rather than not completing it at all, Bokio said.
“As HMRC fines increase over time, it is vital to get your self-assessment completed and filed as soon as possible, or you risk significant financial penalties.
“Just because you’ve missed your first deadline shouldn’t mean you give up entirely: there’s a big monetary difference between filing a few days after the deadline and six months later.”
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