More than 12 million Brits are expected to complete their self-assessment tax return for the period 2022-2023 by the end of January.
If you’re amongst the 5.7 million Brits that are yet to file their tax return, it’s best to get started as soon as possible to avoid the late filing penalty of £100.
Nik Hynes, CFO at New Millennia, which offers funding, payroll services and back office support, is warning Brits to file their tax return before the 31st of January to avoid penalties. Paul commented:
“The only way Brits can file their self-assessment tax return is online, as the paper deadline passed on the 31st October. If you file your tax return up to 3 months late, you will face a penalty of £100.
If you leave it later, you may also have to pay interest on late payments, which are as follows:
- After 3 months, you may have to pay a penalty of £10 a day, for a maximum of 90 days (£900).
- After 6 months, you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater.
- After 12 months, you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater – in some cases, you may have to pay up to 100% of the tax you owe.”
“If you delay paying your tax, you will face additional penalties to those received for filing your tax return late. These include:
- Paying 5% of the tax you owe after 30 days
- Paying a further 5% of the tax you owe after 60 days
- Paying a further 5% of the tax you owe after 12 months”
When are the self-assessment tax return deadlines?
“You will be required to make payments towards your tax bill twice a year, unless:
- Your most recent tax payment bill was under £1000
- You paid more than 80% of the previous year’s tax you owed e.g. through your tax code
Payments are due by the 31st January and 31st July, with each payment being half your previous year’s tax bill.”
Who needs to make this payment?
“You will be required to make a tax return if during the last tax year:
- you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- you were a partner in a business partnership
- you had a total taxable income of more than £100,000
- you had to pay the High Income Child Benefit Charge
You may also need to send a tax return if you have any untaxed income, such as:
- some COVID-19 grant or support payments
- money from renting out a property
- tips and commission
- income from savings, investments and dividends
- foreign income”
How can I make this payment?
“There are 3 ways to file your self-assessment tax return: by Faster Payments, by CHAPS payment or by Bacs payment. It’s important to consider your method of payment to ensure that you allow enough time for the money to be processed before the deadline.”
“Faster Payments is online or telephone banking. Using this method means your payment should reach HMRC on the same day or the following day, which includes weekends and bank holidays.”
“You can also make a CHAPS payment which is expected to reach HMRC on the same working day, so long as you pay within your bank’s processing times. Finally, you can make a Bacs payment; however, note that this usually takes three working days.”