Under the self-assessment regime, individuals are responsible for calculating their tax liability and ensuring that any tax owed is paid on time. At Horsfield & Smith, Chartered Accountants in Bury, we understand the importance of staying compliant with the latest tax rules and regulations. We are here to guide you through the process with expert advice and support.
The self-assessment cycle
Tax returns are issued shortly after the end of the fiscal year, which runs from 6 April to 5 April. For the 2024/25 tax year, the return period will be from 6 April 2024 to 5 April 2025. If you are self-employed or a company director, you will receive a tax return from HMRC. Individuals who file returns online will be sent a notice advising them that a return is due. If you have not received a tax return but owe tax, you should contact HMRC as they may issue one.
The deadline for filing your tax return is 31 January following the end of the fiscal year. For paper returns, the deadline is 31 October following the year-end, but returns must be filed online after this date to avoid penalties.
Penalties for late filing
Late filing of personal tax returns can lead to significant penalties:
- £100 penalty immediately after the due date, even if no tax is owed.
- £10 daily penalty for returns over three months late, up to a maximum of £900.
- £300 or 5% of tax due, whichever is higher, for returns over six months late.
- A further £300 or 5% of tax due for returns over 12 months late, with serious cases incurring a penalty of up to 100% of the tax due.
To avoid these penalties, ensure you file your return on time or get in touch with our team at Horsfield & Smith for assistance.
Calculating your tax liability and ‘coding out’ an underpayment
You can request HMRC to calculate your tax liability in advance by filing your return by 31 October following the tax year. This is also the deadline for arranging for any underpayment to be ‘coded out’ through your tax code. If you file online, HMRC will extend the deadline to 30 December. No matter who calculates your tax, there will only be one assessment that covers all your liabilities for the tax year.
Corrections and amendments to your tax return
HMRC can correct errors in your self-assessment if they identify obvious mistakes. If you notice an error after filing, you have up to 12 months from the submission date to amend your tax return.
Enquiries into your tax return
HMRC may enquire into any return, usually within 12 months of submission. If an enquiry is opened, they will request information to verify the details provided in your return. This does not necessarily mean the return is incorrect, but it’s essential to respond to any queries promptly.
Record keeping
HMRC expects you to retain records of income, expenditure, and any reliefs claimed. It’s important to keep documentation such as:
- For employees and directors: business expense receipts, tax deduction certificates, pension plan certificates.
- For businesses: invoices, bank statements, and details of any personal drawings or cash transactions.
If you are unsure whether your records are in order, our team at Horsfield & Smith can provide guidance.
How we can help
At Horsfield & Smith, we can prepare your tax return and ensure you are compliant with all deadlines and requirements. If there is an enquiry into your return, we will assist you in answering HMRC’s questions and provide expert support.
Whether you are a self-employed individual or a company director, it’s crucial to stay on top of your self-assessment obligations. If you need help with your tax return or have any questions about the MTD for ITSA initiative, please don’t hesitate to get in touch with us.
For more information or to schedule a consultation, call us at 0161 761 5231 or email theteam@horsfield-smith.co.uk.
Stay ahead with MTD for ITSA
If you haven’t yet heard about the new digital tax filing requirements under the MTD for ITSA program (Making Tax Digital), we can help you navigate these changes.
Let us help you stay compliant and avoid penalties while maximising your tax efficiency. Contact Horsfield & Smith today!
