A self-assessment is a tax form that provides HMRC details of an individual’s income and expenditure to calculate tax owed to the state. The form also allows you to fill in details of any relief you may be entitled to.

 

Who must complete a self-assessment?

You must complete a self-assessment if you are a business owner, but entrepreneurs are not the only ones who must complete the self-assessment.  You must file a tax return if:

  • you’re a business partner
  • you’re a business director of a limited company
  • you’re a business minister of religion.
  • you have an annual income of £100,000 or more – this if you are an employee or pensioner
  • you’re a trustee or executor of an estate
  • yours (or your partners) income exceeded £50,000 and one of you claimed child benefits

You must also complete a self-assessment if you have any sort of untaxed income this includes, rental, settlement, and foreign income.  Interest on savings and investments of £10,000 or more are taxable and must be included on your self-assessment.  Click here to check if you meet the criteria to file a self-assessment tax return.

Self-Assessment penalties occur if you need to send a tax return and you missed the deadline.  If any tax is due, you will also incur further penalties and interest too.

 

What are the penalties for late submission of the self-assessment?

1 day late £100 You have 30 days to pay the fine, after which you will be charged a further 5%
90 days late £10 a day You will have to pay £10 a day for up to 90 days on top of the above fine
6 months late £300 or 5% of the tax owed whichever is greater This fine is in addition to the above
12 months late £300 or 5% of the tax owed whichever is greater This fine is in addition to the above

 

 

What are the penalties for late payments?

30 days late 5% of tax due
6 months late 5% of tax outstanding at that date
12 months late 5% of tax outstanding at that date

 

If the return is not submitted after 12 months HMRC may move forward with debt collection, they have the right to remove good totalling to the value tax you owe. Please note HMRC also have the ability to increase your tax bill if they feel tax is being deliberately withheld.

 

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