If you receive income from a source other than employment, you must file a tax return. It is important not only to fulfil this obligation, but also to do so on time. Failure to do so may result in HMRC imposing late payment penalties.
What is Self Assessment, and who is it for?
Self Assessment is a UK tax return submitted to HMRC. The requirement to file a tax return arises for individuals who are
- are self-employed,
- Have acted as a director of a company,
- made profits from the sale of shares, property or other assets,
- been a partner in a partnership.
You can find detailed information on the UK government’s website about your obligation to file a tax return.
When do you have to file your self-assessment tax return?
The UK has specific penalties for late filing of Self Assessment returns, so it’s important to keep track of the deadlines. There are two main deadlines for filing:
- By 31 January if you submit online,
- 31 October for paper self-assessments.
When you file your tax return, you always file for the previous tax year, which in the UK starts on 6 April.
For example, by 31 January 2023 or 31 October 2023 (depending on whether you choose the online or paper format), you must submit a return for the tax year that started on 6 April 2021.
What are the penalties for filing your Self Assessment late?
If you miss the deadline for filing your tax return, you will be fined:
- 100 – initial fine for missing the deadline (even missing the deadline by one minute can trigger this fine).
- After 3 months – £10 per day up to a maximum of £900.
- After 6 months – 5% of the tax due or £300 (whichever is greater).
- After one year – a further 5% of the tax due or £300.
HMRC may also charge interest on late payments. You don’t need to work out the exact penalty yourself – the GOV.UK website has a penalty calculator to help.
As you can see, the penalties for late filing of Self Assessment can be quite significant, especially if you delay for a long time. It’s advisable not to leave this task until the last minute. If you don’t want to worry about deadlines, you can also hire an accountant who will handle all the formalities for you.
