Your tax questions answered

Does Self Assessment affect everyone?

No, however, self assessment rules state that, even if you have not been sent a return, you have a statutory duty to tell the Revenue of any untaxed income.

If you haven't had a return and have nothing to declare, you are not within Self Assessment. You can check the HMRC website to see whether you should be filing a self assessment tax return.

I have not been sent a return, but should I complete one? My only income is from my job which pays £20000 per year.

If you have not been sent a return and all of your income is taxed at source, normally you would not be required to complete a return. However, H M Revenue & Customs, provide guidelines as to who should be completing a tax return.

Does Self Assessment really mean that I have to calculate my own tax? It seems very complicated.

No. You do not have to calculate your own tax under Self Assessment.

However, if you require H M Revenue & Customs to calculate your tax liability in time to pay the correct amount on time (31st January), you will need to file your return by 31st October if filing by paper.

If you file your return online, H M Revenue & Customs will advise you online of the amount you need to pay.

What is the deadline for submitting my return?

31st October is the deadline for submitting a paper return.

30th December is the deadline for submitting an online return if you wish any underpayment of tax of less than £3000 to be included in your tax coding.

31st January is the final deadline for submitting your return online.

What happens if I do not file my return on time?

You will be fined as follows for late filing of your return.

  • Day one (1 Feb unless return issued late) - £100 late filing penalty.
  • 3 months (1 May unless return issued late) - An additional £10 per day charge for up to 90 days. A maximum of £900 plus the £100 from Day one.
  • 6 months (1 August unless return issued late) - A further £300 penalty or 5% of the tax due, whichever is the greater.
  • 12 months (The following 1 Feb unless return issued late) - A further £300 penalty or 5% of the tax due, whichever is the greater. In serious cases you may be asked to pay up to 100% of the tax due as a penalty.

In total if you file your return more than 12 months late, you will be looking at a minimum of £1600 in penalties. In prior years these penalties could be avoided if you made the payment of tax due by the deadline date or if your final tax liability was a refund of tax. However, this is no longer the case and the penalties will apply regardless. It is therefore extremely important to ensure your tax return is filed on time.

Although my return was late, it was not my fault. Do I still have to pay the fine?

Not necessarily.

The law recognises that some things are out of our control. If you can prove that there was a "reasonable excuse" for the lateness of the return, you may well get the fine overturned. General guidance from H M Revenue & Customs states that the following may be considered as a reasonable excuse:

  • A failure in the HMRC computer system
  • Your computer breaks down just before or during preparation of your self assessment tax return
  • Serious illness or disability making you incapable of filing your tax return
  • You registered for HMRC Online Services but didnt get your Activation Code on time

Each case will be reviewed uniquely and on its own merit

Some excuses that will not be successful are:

  • found the online system too complicated
  • left everything to your accountant and they let you down
  • forgot about the deadline
  • did not try to resubmit the return on time once the problem with IT systems was put right
  • registered for HMRC Online Services after the filing deadline

I owe tax, how will it be collected?

The most common method for individuals who pay tax via PAYE is to have their tax code adjusted which can be done on amounts up to £3000.

It is done by collecting additional tax on their salary or pension each week or month in a later tax year.

Paper tax returns must be filed to H M Revenue & Customs by 31 October, or alternatively the tax return must be filed online by 30 December, if the amount owing is to be collected via PAYE.

For self employed or those with large tax liabilities in excess of £3000 the amount must be paid in full direct to H  M Revenue & Customs by 31 Jan following the end of the tax year. Payments on account may also arise for the following tax year.

If I do have to pay tax directly, when do I need to make payments by?

Payment must be made by 31 January following the end of the tax year.

So, if you owe tax for the year to 5 April 2014, you need to make sure that all the tax due has been paid by 31 January 2015.

You may also be liable to make payments on account for the following tax year that will be due on 31 January 2015 and 31 July 2015.

What if my return does not need to be submitted until 31 March? Do I still have to make the payment by 31 January?

If your return was issued late and you are required to file later than 31 January then the due date for payment is the same as the filing date for the return.


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