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With another self-assessment deadline been and gone, it can often feel like the years come around exceptionally quickly when you’re posed with the task of the dreaded tax return. If you’ve not been as organised as you’d like, or if you have not used an online MTD-compliant software to keep track of your outgoings and expenses, you can feel at a total loss when you need to submit everything to HMRC.

That being said, it doesn’t come as a huge shock that more than half a million workers submit their tax return AFTER the 31st January deadline – and there will more than likely still be people out there who are yet to fill it in!

HMRC expects to receive 12 MILLION self-assessment tax returns this year, compared to 10.8m last year. Research shows that as of 24th January, 3.4m were still outstanding, and others are yet to be submitted.

Do you need to submit a self-assessment tax return?

People that are employed by a business or organisation usually have their tax deducted from their salary by their employer, through Pay As You Earn (PAYE), and automatically pays it to HMRC. Employees are not usually required to complete a self-assessment tax return.

The majority of self-employed people who don’t have their tax deducted at source must submit a self-assessment tax return to enable HMRC to tax them correctly on their earnings. You must pay your self assessment tax bill and file a tax return by the deadline, which is 31st January each year.

You will need to submit an HM Revenue & Customs tax return if you fall into one of the below categories:

–        Self-employed (sole trader) who has earned more than £1,000 in the tax year (before taking off anything you can claim tax relief on)

–        A partner in a business partnership

–        Received rental income

–        Received income from savings, investments, and dividends

–        Wanting to claim certain tax reliefs such as on personal pension contributions

–        Received child benefit and you or your partner’s income was over £50,000

–        Have sold assets in the tax year, such as additional properties, shares or crypto and    realised a capital gain

–        PAYE income above £100K

Why exactly are people leaving it so late?

Over the years, more and more people have become self-employed for various reasons. Many find that they have a better work/life balance by doing so, and it fits better with their lifestyle.

Others find they can earn more money from being self-employed and can reap the benefits that way. Whether you’re a contractor or freelancer, working alone as a sole trader, or you employ other people to work for you, being self-employed is something many people strive for.

Recent research shows that the cost of living crisis has also become a key driver of people working this way – whether full or part-time.

Many people have picked up a second job or a side hustle for extra income, or turned their hand at full-time employment to override those rising costs of food, petrol, bills and interest rates.

That being said, many are confused by the complexities of the self-assessment process, which can be complicated, especially if you work a second job or gain a second income through a property, for example.

If you have a range of income streams, Gorilla can help you with your self-assessment process, to avoid being fined by HMRC. An expert accountant can ensure that you have all the advice you need to make sure your tax return goes smoothly year on year.

All our customers at Gorilla also get full access to FreeAgent as standard, to help you stay completely organised and on top of your incomings and outgoings. FreeAgent is cloud-based so you can access your accounts anywhere, on any device that has an internet connection. You can then get a comprehensive, real-time overview of your financial position.

Its inbuilt features will make your life much easier by automating many tasks, allowing you to put minimal time into bookkeeping and admin. You can upload receipts, manage expenses and have an efficient billing and invoicing system, so that your VAT returns can be generated automatically and electronically submitted to HMRC.

Having that extra support throughout the course of the year can ensure that the self-assessment deadline is never missed and you always feel prepared.

Over the Christmas period, a lot of people found it difficult to get through the HMRC for assistance, being made to wait for phones to be answered and receiving poor customer service – with the right accountant by your side, you won’t need to waste time trying to get in touch with any third party.

How much does a late submission of my tax return cost?

Failing to file your self-assessment tax return on time comes with a financial penalty. If you are late, you will attract an immediate £100 fine. HMRC then charges an additional £10 each day the submission is late, over the course of the next 3 months, bringing the total fine to £1000.

Additional penalties will continue to accrue the longer your self-assessment is outstanding.

If you are found to have made any mistakes, accidentally or otherwise, you will also be penalised. It is incredibly important to make sure that all of your submissions are done accurately to avoid this. Official figures show that HMRC issued over 100,000 fines in the 2021/22 tax year due to inaccuracies.

At a glance:

–        There is an automatic late-filing penalty of £100, payable to HMRC as soon as you miss the deadline.

–        After three months, there’s an additional £10-per-day penalty, up to £900.

–        After 6 months, there’s a further penalty of £300 (or 5% of the tax owing if this is greater), on top of the penalties already mentioned.

–        If you’re a year or more late, you’ll be charged another £300 or 5% of the tax owing if this is greater, in addition to the penalties already detailed above.

Can I appeal my late filing?

If you have a valid reason as to why your self-assessment was late, you can appeal any late filing charges. Your valid reason could be your partner, or a close relative has died, or that you have a serious illness or accident that caused you to submit late. If you were hospitalised shortly before the deadline, this would also be classed as a legitimate reason.

You can also appeal if you have a serious software or computer malfunction, but you would need to be able to prove this.

You can appeal your late-filing penalty after you have submitted your tax return within 14 days of the missed deadline. HMRC may ask for evidence and there are no guarantees that a late-filing penalty will be waived.

If you are still yet to submit your tax return from the last deadline, Gorilla can help – even if you’re not yet a client of ours.

You can find out more information about submitting a self-assessment with Gorilla Accounting here.

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