This blog post was first published on 27 January 2017 and was last updated on 23 January 2018.
If you’re a small business owner or freelancer who has to submit a tax return this year, you’ll know that that you have to submit your Self Assessment for the 2016/17 tax year to HMRC by midnight 31st January. This is also the date by which you have to pay your tax bill - so it’s important to get organised and make sure that your payment reaches HMRC before the deadline.
If you’re getting a little anxious about whether you’ll be able to actually complete everything on time, don’t worry. The good news is that if you've registered your business for Self Assessment then there’s still time to get your tax return in order and submitted to HMRC. This means you'll (hopefully) avoid incurring a fine of at least £100. Here’s some useful information if you still haven’t filed your return:
Act quickly - but be pragmatic
Let’s start with the bad news. If you have still to register your business for Self Assessment, it’s highly unlikely at this late stage that you’ll be able to do so and receive your activation PIN and Unique Taxpayer Reference (UTR) - which HMRC sends to you by post - in time. So the fine of at least £100 is probably unavoidable at this stage.
However, you still need both your activation PIN and UTR to complete and submit your return, so make sure you proceed as normal once you receive them. Here’s what you need to complete your tax return once you’ve got those numbers. The longer you leave it to file your return and pay your tax, the more penalties you can accumulate, so don’t delay any longer than you have to!
Know how long it will take your payment to reach HMRC
Take a look at this handy rundown of the main payment options that HMRC accepts and how long each type of payment takes to process.
Whichever method you plan to use to pay your tax bill this year, if you’re planning to meet the deadline then make sure you file your Self Assessment with HMRC in enough time to allow your payment to reach them before the 31st January. Otherwise you will have to pay interest and may even face a penalty, even if you manage to file your tax return on time.
Don’t panic - late filing isn’t the end of the world
If you find yourself struggling to complete your tax return on time, don’t do a poor, rushed job just to get it submitted. If you miss the deadline, the worst that can happen in the first instance is that HMRC will fine you £100 for failing to file on time and you’ll be charged interest for paying your tax late. The tax inspectors won’t be immediately knocking at your door and you won’t face immediate prosecution by the authorities. Above all, remember that you can - and should - still submit your tax return after the deadline has passed!
Don’t get lulled into a false sense of security, though. HMRC starts increasing the penalties for late filing if you leave for more than three months, and there are also additional charges and interest to pay when it comes to actually paying your tax bill late. Dawdle too long and those penalties will quickly start to add up!
Need some support?
If you still need to prepare and file your 2016/17 Self Assessment tax return and would like some additional support, why not download our step-by-step guide for preparing and filing your 2016/17 tax return? It talks you through each stage of the process and provides lots of additional hints and tips to help you complete each section of the Self Assessment form.
Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.