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We summarise the self assessment rules and penalties for failing to comply with your obligations. At Finnies, we can prepare your tax return on your behalf and advise you on payments that may need to be made to HMRC.
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.
Tax returns are issued shortly after the end of the fiscal year. The fiscal year runs from 6 April to the following 5 April (thanks to the switch from the Julian to the Gregorian calendar in 1752), so 2022/23 runs from 6 April 2022 to 5 April 2023. 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 is normally required to file his tax return by 31 January following the end of the fiscal year (although there were concessions made in recent years due to COVID). The 2022/23 return must be filed by 31 October 2023 if submitted in 'paper' format. Returns submitted after this date must be filed online otherwise penalties will apply.
Late filing penalties apply for personal tax returns as follows:
*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:
The taxpayer does have the option to ask HMRC to compute their tax liability in advance of the tax being due in which case the return must be completed and filed by 31 October following the fiscal year. This is also the statutory deadline for making a return where you require HMRC to collect any underpayment of tax through your tax code, known as ‘coding out’. However if you file your return online HMRC will extend this to 30 December. Whether you or HMRC calculate the tax liability there will be only one assessment covering all your tax liabilities for the tax year.
HMRC may correct a self assessment 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.
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.
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.
Documents you have signed or which have been provided to you by someone else:
Personal financial records which support any claims based on amounts paid eg certificates of interest paid.
We can prepare your tax return for personal tax self assessment on your behalf and advise on the appropriate payments on account to make.
If there is an enquiry into your tax return, we will assist you in answering any queries HMRC may have. Please do contact us at Finnies for help.
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