A guide to completing your Self Assessment tax return

Completing and submitting your Self Assessment tax return can seem overwhelming, but it’s a manageable process with the proper guidance and understanding. Whether you’re self-employed, a director of a company, or someone with additional income, filing your tax return on time is crucial. This guide highlights the essential steps of completing a Self Assessment, key deadlines, the benefits of submitting early, and what happens if you miss the deadline.

What you must do and by when

If you’re required to file a Self Assessment tax return, you must declare all your income to HM Revenue & Customs (HMRC). This includes income from self-employment, rental income, dividends, savings, and any other taxable earnings.

Key deadlines

• The deadline for filing your online tax returns is 31 January, following the end of the tax year. So, for the 2023/24 tax year, your online return must be submitted by midnight on 31 January 2025.
• The deadline for paying any tax you owe is also 31 January, following the end of the tax year. For the 2023/24 tax year, the payment is due by midnight on 31 January 2025.

What you need to complete your tax return

To complete your Self Assessment, you’ll need the following documents:

• Your unique taxpayer reference (UTR): A 10-digit number HMRC gives you when you register for Self Assessment.
• Income details: P60s, P45s, payslips, self-employment income including invoices, rental income, dividends, interest, and other relevant income sources.
• Records of expenses: If you’re self-employed, you must provide details of allowable business expenses.
• Employee benefits: P11Ds covering benefits such as private medical insurance, company cars etc.
• Bank statements: If you have additional income from savings, investments, or other sources, gather your bank statements.
• National insurance number: This number is essential for identification and tax purposes.

Benefits of submitting early

Filing your tax return well in advance of the 31 January deadline offers several benefits:

1. Avoid the last-minute rush: Submitting your return early gives you more time to gather all necessary documents, seek professional advice, and avoid errors. This can save you stress in the final days before the deadline.
2. Early knowledge of tax liability: The sooner you file, the sooner you’ll know how much tax you owe. This means you can set aside funds for your tax bill and avoid any surprises come January. In cases where you are due a tax refund, you will receive this within a few weeks of HMRC processing the refund instead of waiting until 31 January.
3. Less likely to miss key deadlines: If you file your return early, you’re less likely to miss important deadlines and incur penalties, as you’re giving yourself plenty of time for corrections or clarifications.
4. Time to plan payments: Early submission allows you to spread out your finances, including setting up HMRC’s Time-to-Pay Plan (more on this below), in case you need to spread your tax payments over a longer period.

Penalties and interest for late filing and payments

Failing to submit your Self Assessment tax return or pay your tax bill on time can result in significant penalties, including:

1. Late Filing Penalties:
   1. If you file your return between 1 day and 3 months late, you’ll face an automatic penalty of £100.
   2. After 3 months, additional penalties are applied: £10 per day for up to 90 days.
   3. After 6 months, you’ll incur a penalty of 5% of the tax due or £300 (whichever is greater).
   4. After 12 months, you may face further penalties based on whether you are struggling to pay your tax bill or if HMRC thinks you are deliberately concealing information from them.
2. Late payment penalties:
   1. If you fail to pay your tax on time, HMRC will charge interest from the due date until the date of payment.
   2. After 30 days, HMRC will apply a 5% penalty on the outstanding tax owed. Additional penalties apply after 6 and 12 months if your tax bill remains unpaid.
3. Interest charges: HMRC may also charge interest on unpaid tax and penalties incurred from filing your tax return late or making late payments. The current rate of interest charged is 7.5%.

Filing your tax return and paying any outstanding tax on time could save you a lot of money and worry.

HMRC’s Time-to-Pay Plan

If you cannot pay your tax bill by the 31 January deadline, you may be eligible for HMRC’s Time-to-Pay (TTP) arrangement. This plan allows you to spread your tax payments over a longer period. To qualify, you must meet certain criteria:

• You must have already filed your latest Self Assessment tax return.
• Your tax bill is less than £30,000.
• You are within 60 days of the payment deadline.
• You have no other outstanding debts or payment plans with HMRC.

To apply for the TPP arrangement, you must contact HMRC as soon as possible. HMRC will assess your financial situation and, if approved, set up a payment plan to help you manage your tax bill.

Payments on Account

You may be required to make payments on account when paying your Self Assessment tax bill.  This system helps to spread your tax payments throughout the year, making it easier to manage your finances. Here’s how it works:

Payments on account are advance payments towards your next year’s tax bill. They are based on your previous year’s tax liability and are designed to help you pay your tax in instalments. Each payment is usually 50% of the previous year’s tax bill. There are two payments on account each year:

• The first payment is due on 31 January during the tax year.
• The second payment is due by 31 July, six months after the first.

You can check whether you need to make payments on account by reviewing your previous Self Assessment tax return. If you’re unsure whether you need to make these payments or if your income has changed significantly, it’s a good idea to speak to an accountant or tax professional.

Filing your Self Assessment tax return doesn’t have to be daunting. With early preparation, understanding deadlines, and knowing what to do in case of financial difficulty, you can complete your tax return smoothly and avoid any unnecessary penalties. If you need help completing your tax return, you can arrange a free consultation with the team at Michael Filiou Ltd on 01707 665533 or email hello@michaelfiliou.com.