We’ve been all hands on deck at Gorilla in the run up to the New Year. Not only have we been getting our clients ready to take well-earned breaks over Christmas, but self-assessment submission deadline day is just around the corner on 31st January.

A common question that we get around this time of year is whether our clients actually need to do a tax return. If you’re unsure whether you need to or not, it’s best to get in touch with an accountant or HMRC directly.

With a New Year just around the corner, it brings with it the annual responsibility for freelancers, self-employed individuals and small business owners in the UK – the submission of the self-assessment tax return.

Last year over 600,000 missed the self-assessment tax return deadline, with each earning an instant £100 late filing penalty. However, a record number of taxpayers filing their 2021-22 tax return did it ahead of the 31st January deadline – a whopping 97%!

But how many people in the UK were due to send a self-assessment last year?

  • Overall, HMRC expected 12,060,872 self-assessment tax returns due for the 2021-22 financial year.
  • Of those, 11,733,465 were filed on time, including expected returns, unsolicited returns and late registrations.
  • The peak hour of submissions, where 68,462 were submitted, was on deadline day, 31st January, between 4pm-5pm – cutting it pretty fine!
  • Cutting it even finer were the 36,767 people who filed their tax return between 11pm & 11.55pm. Imagine the horror of your internet cutting out and flicking over to midnight as you hit send.
  • People were even filing on Christmas Day last year – a total of 3,275. We want to make sure no one has to do this!
  • Getting MTD ready, 10,965,993 people submitted their forms electronically on the 31st January, which was 96.2% of all the tax returns filed. (The deadline for paper filing was 31st October!)

Who must send a tax return on 31st January?

  • You must send a tax return if, in the last tax year (6 April to 5 April), any of the following applied:
  • You were a self-employed sole trader and earned more than £1,000.
  • You were a partner in a business partnership
  • You had a total taxable income of more than £100,000
  • You had to pay the High Income Child Benefit Charge

You may also need to submit a self-assessment if you have any untaxed income on:

  • COVID-19 grant or support payments
  • Money from renting a property
  • Any tips or commission
  • Income from savings, investments and dividends
  • Foreign income

What are the penalties for late or inaccurate submissions?

If your self-assessment tax return contains errors or inaccuracies, or if it’s filed after the deadline, it’s possible that you will receive a penalty from HMRC.

The penalties for submitting your self-assessment tax return late are:

  • 1 day late – You must pay a penalty of £100
  • 3 months late – You can receive a penalty of £10 a day for a maximum of 90 days (£900)
  • 6 months late – You can receive a further penalty of 5% of the tax you owe or £300, whichever is greater
  • 12 months late – You can receive a further penalty of 5% of the tax you owe or £300, whichever is greater. It’s possible that you have to pay up to 100% of the tax you owe

How do I avoid any penalties?

Submitting your self-assessment before the 31st January will help you steer clear of any penalties. HMRC imposes pretty strict penalties on anything submitted late – you’ll incur a £100 fine for anything submitted after midnight on the 31st, no matter how close to the wire it is.

These penalties will escalate based on the degree of the delay. By submitting your self-assessment on time, you save yourself from unnecessary financial setbacks that could impact your bottom line.

Making sure that this financial reporting is accurate will also ensure you don’t face any penalties down the line. Timely submission allows you to present accurate and up-to-date financial information to HMRC. This is crucial for maintaining transparency and integrity in your tax affairs as the self-assessment provides a comprehensive overview of your income, expenses, and other relevant financial details, ensuring that your tax liability is calculated correctly.

How to avoid a last minute rush with your self-assessment

  • Be organised throughout the year. Keep all your files together using a piece of bookkeeping software such as FreeAgent. When you sign up to Gorilla, FreeAgent is included in all of our all-inclusive packages.
  • Procrastination often leads to errors and oversights. Make sure your tax return is done in advance rather than waiting until the last minute.
  • By submitting your self-assessment well before the deadline, you give yourself ample time to review the information, double-check calculations, and address any discrepancies, reducing any mistakes.

Should I use an accountant to submit my self-assessment?

Meeting the January deadline can often be stressful, but seeking professional advice can help. If you encounter complexities or uncertainties in your financial situation, having extra time before the deadline to speak with an accountant will allow them to give you their insights and help you make informed decisions, optimising your tax position.

Ensuring the accuracy of your self-assessment tax return is crucial to avoid penalties and maintain financial transparency and there are several ways how an accountant can help with this:

Thorough Record-Keeping:

Accountants emphasise the importance of maintaining accurate and organised financial records throughout the tax year. This includes receipts, invoices, bank statements, and any other relevant documents. A well-maintained record system forms the foundation for an accurate self-assessment.

At Gorilla Accounting, we use FreeAgent to keep all of this in one place, easily accessible to you and your accountant, anywhere, anytime you need it as it is cloud-based. When you sign up to Gorilla, all of our clients use this as part of their package.

Understanding Tax Regulations:

Tax laws and regulations are complex and can change quite often. An accountant stays updated on these changes and understands the nuances of the tax code so you don’t have to. This allows you to concentrate on your own work, rather than keeping up with the financial side of things too.

By leveraging their expertise, they can ensure that your self-assessment aligns with the latest regulations, maximising your deductions and credits while staying compliant.

Reviewing Income Sources:

Accountants are nothing short of meticulous and will review all your income sources to ensure that no income is omitted, including from employment, self-employment, investments, and any other relevant sources.

Accuracy in reporting all income streams is essential for a comprehensive and precise self-assessment, which won’t come back with issues and fines down the line.

Expense Verification:

Deductible expenses play a significant role in reducing your taxable income and an accountant can carefully verify anything you’re eligible to expense or deduct.

Common deductible expenses include business-related costs, allowable travel expenses, and professional fees.

Reviewing Pension Contributions:

Pension contributions can have a significant impact on your tax liability.

An accountant can review your pension contributions to ensure they are accurately reported, taking advantage of available tax relief while adhering to contribution limits.

Double-Checking Calculations:

Again, accountants are nothing short of meticulous. Accurate calculations are essential in preparing a precise self-assessment and your accountant will double-check all figures, including income, expenses, and deductions, to avoid errors that could lead to inaccuracies in your tax return.

Should I sign up to an accountancy firm in 2024?

We’re passionate about providing a fantastic service to our clients, and this includes ensuring self-assessment tax returns are done accurately and on time. Engaging the services of a qualified accountant not only ensures the accuracy of your self-assessment tax return but also provides valuable insights into optimising your tax position.

At Gorilla, all of our accountants have the expertise to help you navigate the complexities of tax regulations, minimise errors, and make informed financial decisions.

With the 31st January deadline for self-assessment representing a crucial milestone for freelancers and self-employed individuals, now is the perfect time to appoint a Gorilla accountant to help you demonstrate financial responsibility, avoid penalties, and pave the way for a more organised and stress-free start to the new year.

You can sign up today by filling in our online form, and one of our team will be in touch!