Personal Tax – Self Assessment

8th January 2014

Under the self-assessment regime an individual is responsible for ensuring that their tax liability is calculated and any tax owing is paid on time, but if you would like to speak to us for some advice, please call us on 01332 813380, we are always happy to help.

The Self-Assessment Cycle

Tax returns are issued shortly after the end of the fiscal year. The fiscal year runs from 6 April to the following 5 April, so 2018/19 runs from 6 April 2018 to 5 April 2019. Tax returns are issued to all those whom HMRC are aware need a return including all those who are self-employed or company directors. Those individuals who complete returns online are sent a notice advising them that a tax return is due. If a taxpayer is not issued with a tax return but has tax due they should notify HMRC who may then issue a return.

A taxpayer has normally been required to file his tax return by 31 January following the end of the fiscal year. The return must be filed by 31 October if submitted in ‘paper’ format. Returns submitted after this date must be filed online otherwise penalties will apply.

Penalties

Late filing penalties apply for personal tax returns as follows:

£100* penalty immediately after the due date for filing (even if there is no tax to pay or the tax due has already been paid)

* Previously the penalty could not exceed the tax due, however this cap has been removed. This means that the full penalty of £100 will always be due if your return is filed late even if there is no tax outstanding. Generally if filing by ‘paper’ the deadline is 31 October and if filing online the deadline is 31 January.

Additional penalties can be charged as follows:

over 3 months late – a £10 daily penalty up to a maximum of £900

over 6 months late – an additional £300 or 5% of the tax due if higher

over 12 months late – a further £300 or a further 5% of the tax due if higher. In particularly serious cases there is a penalty of up to 100% of the tax due.

Changes to the tax return

Corrections/Amendments

HMRC may correct a self-assessment within nine months of the return being filed in order to correct any obvious errors or mistakes in the return

An individual may, by notice to HMRC, amend their self assessment at any time within 12 months of the filing date.

Enquiries

HMRC may enquire into any return by giving written notice. In most cases the time limit for HMRC is within 12 months following the filing date.

If HMRC does not enquire into a return, it will be final and conclusive unless the taxpayer makes an overpayment relief claim or HMRC makes a discovery.

It should be emphasised that HMRC cannot query any entry on a tax return without starting an enquiry. The main purpose of an enquiry is to identify any errors on, or omissions from, a tax return which result in an understatement of tax due. Please note however that the opening of an enquiry does not mean that a return is incorrect.

If there is an enquiry, we will also receive a letter from HMRC which will detail the information regarded as necessary by them to check the return. If such an eventuality arises we will contact you to discuss the contents of the letter.

Keeping records

HMRC wants to ensure that underlying records to the return exist if they decide to enquire into the return.

Records are required of income, expenditure and reliefs claimed. For most types of income this means keeping the documentation given to the taxpayer by the person making the payment. If expenses are claimed records are required to support the claim.

Checklist of information need to complete self assessment returns

  • Bank Interest
  • Dividends
  • Rental Income – include your P60
  • Pension Income
  • Other Employments
  • Foreign Income
  • Self-Employment Partnership Income
  • Capital Gains or Losses
  • Chartable Contributions
  • Student Loans
  • Child Benefit
  • Any other income you may have received in the tax year

RDG Accounting are Accountants in Castle Donington, Derby who provide professional Accounting solutions for business and individuals in Derby, Long Eaton, Leicester, Nottingham and Ashby. To book a FREE Initial Review meeting, call us on 01332 813380 or email

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