Don’t be caught out by the Self Assessment deadline!

Tuesday 31st January is upon us! If you’re a small business owner or freelancer who has to submit a tax return this year, you’ll know that this is the date by which you have to submit your Self Assessment for the 2015/16 tax year to HMRC. It’s 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 midnight 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 do to get started on 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

Here’s a handy rundown of the main payment options that HMRC accepts, how long each type of payment takes to process and how you can use each payment method.

Payment type How long it takes for the payment to reach HMRC How you can pay
Online or telephone banking (Faster Payments) Same or next day, including weekends and public holidays By using the bank details listed on gov.uk
CHAPS Usually the same working day (if you pay within your bank’s processing times) By using the bank details listed on gov.uk
Bacs Three working days By using the bank details listed on gov.uk
Debit card Three working days By following the links from your HMRC online account.
Credit card (1.5% charge) Three working days By following the links from your HMRC online account.
Cheque through the post Three working days By writing a cheque made payable to ‘HM Revenue and Customs only’ followed by your Unique Taxpayer Reference (UTR) number. It should be posted along with your paying-in slip to HMRC, Direct, BX5 5BD – no street name, city name or PO Box is required.
Existing Direct Debit Three working days By setting up a Direct Debit from your HMRC online account. (Note that you have to set up a new direct debit every time you wish to make a payment).
New Direct Debit Five working days By setting up a Direct Debit from your HMRC online account.
At the Post Office (only an option if you get paper statements from HMRC and have a paying-in slip which they sent you). Same day (Monday-Friday only) By paying a maximum of £10,000 by debit card, cash or cheque made payable to ‘Post Office Ltd’.
At your bank or building society (only an option if you still get paper statements from HMRC and have the paying-in slip they sent to you in the post) Same day (Monday-Friday only) By paying cash or writing a cheque made payable to ‘HM Revenue and Customs only’ followed by your Unique Taxpayer Reference (UTR) followed by the letter ‘K’.

Note: For payments where a reference is required you will need to use your 10-digit Unique Taxpayer Reference (UTR). Where a payment reference number is asked for you should use your UTR followed by the letter ‘K’.

As you can see, the majority of the payment methods only apply on banking days (i.e. Monday to Friday), and many of these methods take a few working days for your payment to reach HMRC.

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 2015/16 Self Assessment tax return and would like some additional support, why not download our step-by-step guide for preparing and filing your 2015/16 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.

If you’ve resolved to make your life easier at tax time from now on, take a look at how using FreeAgent can help you file your Self Assessment return in the future.


Want more bookkeeping and tax tips?

Sign up for our helpful guides to claiming expenses, filing your tax return and more.