Perhaps one of the least welcome aspects of being self-employed is the process of completing a Self Assessment tax return. Using the services of an accountant throughout the year is likely to make it easier for you to finalise your assessment. The alternative is a mad dash in January to prepare figures to avoid penalties for submitting late. Of course, a minority of the self-employed do their own assessment. But while this saves a few pounds in costs, it’s likely to add to the stress.
Whatever process you use the key date for the 2012/2013 tax year is the midnight on 31st January 2014 deadline. Note this is the final submission date for online tax returns and is very much the last hurrah. Paper returns should have been sent to HMRC by 31st October 2013. Note these deadlines apply to just about everybody with very few exceptions.
One exception that does exist relates to individuals who owe tax and have requested HMRC collect it through their tax code. In this example, the applicable deadline was 30 December 2013. There are other instances too. These include those where you may not have known you had to comply with the Self Assessment regime until notified by HMRC after 31 October 2013. In these cases you typically have 3 months from the date of the letter to submit a return but if you are in any doubt you must contact HMRC to clarify the applicable deadline.
It’s simply not worth taking a slap dash approach to Self Assessment deadlines. Penalties have been stiffened up in recent years for late returns. For example, if you are a day late you can expect to pay automatic penalty of £100. This applies even if you have no tax to pay. Up to 3 months late you can expect a penalty of £10 per day up to £900. This is in addition to the automatic £100 penalty. At 6 months and beyond you can expect to pay £300 or 5% of the tax due whichever is higher. It’s also worth adding that once 12 months have passed penalties can get much higher. In some instances penalties can reach 100% of the tax due plus the statutory minimum that would ordinarily apply.
Finally it’s worth adding that you can appeal against a penalty. However it’s clearly better to meet the 31 January 2014 deadline so you can focus on your business.