Understanding the various deadlines and processes related to self-assessment tax returns in the UK is crucial for all self-employed individuals and businesses. It is not only about knowing the dates, but also understanding what is expected from you by HMRC, how to file your returns online, how to calculate your income, and when you are expected to pay your taxes. In this article, we’ll provide you with all the relevant information for the tax year 2023/2024.
Understanding Self-assessment Tax Return Process
Before diving into deadlines, it’s important to understand the overall process of self-assessment tax returns. Self-assessment is a system HMRC uses to collect income tax. It’s primarily used by the self-employed, but also applies to anyone with income not taxed at source, like rental or investment income.
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Every tax year, which runs from 6 April one year to 5 April the next, you’ll need to complete a self-assessment tax return, detailing your income and capital gains, and claiming allowances and reliefs.
Filing your returns involves compiling information about your income, calculating your tax, and submitting this data to HMRC. This process can be done online through the HMRC website. However, you will first need to register for self-assessment online, a process that could take up to 20 working days as HMRC will post you a Unique Taxpayer Reference (UTR).
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Key Dates and Deadlines for Tax Returns
Now let’s consider the key dates and deadlines. HMRC sets specific dates for different stages of the tax return process, and it’s crucial to meet these deadlines to avoid penalties.
The tax year 2023/2024 runs from 6 April 2023 to 5 April 2024. After the end of the tax year, the first key date is 5 October 2024. This is the deadline for notifying HMRC that you are liable for taxation and need to file a tax return.
The next critical date is the deadline for paper tax returns, which falls on 31 October 2024. If you choose to do your tax return on paper rather than online, it must be in by midnight on this date. However, the majority of people now use the online system and the deadline for this is midnight on 31 January 2025.
If you owe any tax, you are expected to pay this by midnight on 31 January 2025. This is also the deadline for making your first ‘payment on account’ for the next tax year (2024/2025), if this applies to you.
How to File Your Returns Online
Filing returns online through the HMRC portal is a straightforward process. Once you’ve registered for self-assessment and received your UTR, you can then sign in to your account and submit your returns. The portal has built-in checks and calculations, guiding you through the process, and offering tips and help.
You’ll need to provide details of your income during the tax year, such as from self-employment, employment, rent, dividends, and interest on savings. You’ll also need to declare any capital gains, claim allowances and reliefs, and confirm your personal details. After this, the system will calculate your tax bill, or tell you if you’re due a refund.
Consequences of Missing the Deadline
It’s important to note that missing the deadline for filing your tax return or paying your tax bill can result in penalties. If your online tax return is up to three months late, you’ll be charged a £100 penalty. If it’s later than this, you could be charged more.
Also, if you pay your tax bill late, you’ll be charged interest from the date the payment was due. The interest rate changes regularly, so it’s best to check the current rate on the HMRC website. If you’re more than 30 days late, you’ll be charged an initial penalty of 5% of the tax due. Additional penalties apply if you’re 6 months late, and again if you’re 12 months late.
All this underlines the importance of being aware of the tax return deadlines, and ensuring you meet them. This will not only help you avoid penalties, but also ensure you’re fulfilling your responsibilities as a self-employed individual or business.
Managing Your Self-Assessment Payments
A significant part of the self-assessment process is managing your payments. This involves understanding how much tax you owe, when your payments are due, and how to make these payments.
For the tax year 2023/2024, if you owe tax, it is payable by midnight on 31 January 2025. If you’re self-employed, you may also need to make payments on account. These are advance payments towards your next tax bill (2024/2025), and they’re typically half your previous year’s tax bill, split into two payments. The first payment on account is due by midnight on 31 January 2025 and the second by midnight on 31 July 2025.
Payments can be made in several ways, including Direct Debit, online or telephone banking, debit or credit card, or at your bank or building society. You can also use the Budget Payment Plan to make regular payments in advance. If you’re struggling to pay your tax bill, it’s important to contact HMRC as soon as possible. They may be able to set up a payment plan with you, to help you manage your debt.
Don’t forget that if you delay or miss a payment, HMRC will charge you interest on the outstanding amount from the date it was due. Therefore, it’s essential to plan your finances to ensure you have sufficient funds to meet your tax liabilities on time.
Updating Your Personal Details
When completing your self-assessment tax return, it’s crucial to ensure all your personal details are accurate and up-to-date. This includes your address, contact details, and National Insurance number. Bear in mind that HMRC uses the details on your tax return to update your record, so any inaccuracies could lead to problems in the future.
Additionally, it’s important to inform HMRC if your circumstances change during the tax year. For example, if you become or cease to be self-employed, or if you start or stop receiving income from a rental property. This will help HMRC to ensure that your tax code and Class NICs are correct and that you’re paying the right amount of tax.
Conclusion: Stay Organised and Avoid Penalties
To conclude, knowing the deadlines for the self-assessment tax return process is essential for all self-employed individuals and businesses. It’s not just about being aware of the dates, but also understanding the process, knowing how to file your returns online, and how to calculate your tax bill.
Remember, the deadline for paper tax returns is midnight on 31 October 2024, while the deadline for online tax returns and your first payment on account is midnight on 31 January 2025.
Ensure that you stay organised, keep accurate records, and file your returns and make your payments on time. This way, you’ll avoid any penalties and keep your financial affairs in good order. Lastly, if you’re unsure about anything, don’t hesitate to seek help, either from HMRC directly or from a professional tax advisor.
