THE self-assessment tax return deadline is fast approaching. If you fail to submit your tax return by January 31, you will receive a £100 fine, regardless of whether you have any tax to pay, or have already paid it.
Previously, HM Revenue and Customs used to cancel penalty notices where no tax was due or had been paid. However, they are becoming far stricter on the filing deadline.
So what should you do? The deadline for submitting a paper tax return passed on October 31, 2012. You, therefore, have to submit a return electronically, either using HM Revenue and Customs own online site or by appointing an advisor who can submit electronic returns. Be warned – if your affairs are complex, you cannot use the online site.
Have you worked out if you need to complete a tax return? The tax return covers the year April 6 , 2011 to April 5, 2012.
The most obvious is starting self employment. But you may have started renting property during the year, or have some untaxed income, possibly from abroad. All these may require you to prepare a return.
You are required to notify HM Revenue within six months of the end of the tax year that you need to complete a tax return, they may impose a penalty if you failed to do so.
Don't forget, if you are in a partnership, make sure that the partnership return also gets submitted in time.
Each partner will be liable for a penalty for late filing of the partnership return, so if there are five of you, and the return is five days late, that's £500 in penalties — £100 from each partner!
If each partners individual return is also five days late, that's £1,000 — £200 from each partner, £100 for the individual return, £100 for the partnership return.
What information do you need?
If you are employed, your P60 end of year return, together with any P11D for benefits you may have received.
For savings, interest certificates and dividend vouchers.
If you have started self-employment, hopefully you have already appointed an advisor and they will have given you details of what is required. This can vary dependent on the size of the business and its market.
If not, appoint an adviser. The details of what may be required vary considerably with each individual case, an article such as this cannot go into specifics. So, if in any doubt, take advice.
And remember, filling out a tax return does not necessarily mean you will pay tax.
Your self-employment profits may not use up the whole of your personal allowance, and if you have taxed savings income – you could get some or all of this tax back.
You may have losses that can be set against other income sources.
You may be a pensioner, entitled to the married couples allowance, which you have not received.
Do not leave it too late, or ignore the situation — the penalties increase with time.
The author accepts no responsibility for action taken as a result of reading this article. Always seek professional financial advice.
Alan Woodward is sole practitioner at Woodwards Chartered Certified Accountants, with over 20 years experience in general practice in the Bay and South Devon.