Self Assessment, the annual tax return, is an obligation for all self-employed individuals in the United Kingdom. Completing the return can be challenging due to the frequent difficulties in determining accurate income and expenses. Warning: it’s not enough to simply find a UK tax calculator online! Preparing your tax return on your own at home can lead to many issues, it is often inefficient and full of errors, which can prevent you from claiming a UK tax refund.
For years, the accountants at MB TAX ADVICE have been preparing tax returns for self-employed individuals from all over the world working in the United Kingdom. It’s important not to wait until the last moment, get in touch with us as early as April. After an initial consultation with our tax specialists, it may turn out that you’re missing some of the documents needed to prove your income or expenses. Remember, the more documented expenses you have as a self-employed person working privately (not as a subcontractor), the lower your final profit will be, which means you’ll pay less tax or may even be entitled to a refund of overpaid tax!
Do you submit your tax return in paper form? Be aware of late penalties!
Those who submit their tax returns on paper have until the end of October each year to send them. Anyone who misses this deadline is automatically charged a £100 penalty, even if they don’t owe any tax to HMRC. However, MB TAX ADVICE offers a solution, online filing, which remains available until the end of January.
New penalty every quarter
Those who are late and submit their tax return within three months after the deadline will pay a fixed penalty of £100. Failing to file after that period results in an additional £10 fine for each day of delay over the next three months, up to a maximum of £900. If, after this six-month period (when the total penalties can already reach £1,000: £100 + £900), the return is still not submitted within the following three months, another penalty will be added, either 5% of the tax due or £300, whichever is greater. After nine months, when the total penalties may already reach £1,300, the same penalty procedure will be repeated, in the best case, another 5% (or even up to 100%) of the due tax, or £300 for every additional three months of delay.
Expert advice
If you realise you’re late, you should file your tax return as soon as possible. The new penalties are very high, and your debt will increase every quarter.
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