3.2 million people have yet to file their self-assessment tax return and with just over one week left and failure to do so resulting in a fine of up to £1,600, Moneywise explains what you need to know.
Do I need to fill in a self-assessment form?
Tax is usually deducted automatically from people’s wages, pensions and savings. But people with other income must declare it to HM Revenue and Customs (HMRC) via self-assessment.
You’ll need to send a self-assessment tax return if in the last tax year – 6 April 2014 to 5 April 2015:
- You were self-employed.
- Your income was over £100,000.
- You got £2,500 or more in untaxed income, eg from renting out a property or having savings and investments.
- Your savings or investment income was £10,000 or more pre- tax.
- You made profits from selling things like shares, a second home, personal possessions and need to pay Capital Gains Tax.
- You were a company director - unless it was for a non-profit organisation such as a charity and you didn’t get any pay or benefits, such as a company car.
- Your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit.
- You had income from abroad, such as wages or rental income on overseas property that you needed to pay tax on.
- You lived abroad, but had a UK income, such as a pension.
- You were a trustee of a trust or registered pension scheme.
- You got dividends from shares and you’re a higher or additional rate taxpayer, and another reason in the list above applies. (If no other reason on the list applies but you fall into this category, you need to contact the helpline on 0300 200 3300.)
Certain other people may also need to send a return – for example religious ministers. If you’re unsure, check using the Government’s tool.
How do I file a tax return?
You need to register to file a tax return if you didn’t send one last year. This includes those who filed a return in previous years, but didn’t do so last year.
Registration closed on 5 October 2015. If you get in touch with HMRC now, you’ll be set up to file through self-assessment although you may have to pay a penalty.
If you’re registered already, you can send your tax return using HMRC’s free self-assessment online service.
Can I file my return by post?
Unless you’re a trustee of a registered pension scheme or non-registered company, you’ve unfortunately missed the deadline to file by post – this was the 31 October 2015.
What do I need to pay?
By 31 January 2016 you also need to pay your tax bill. This will include any tax you owe for the previous tax year, minus any payments already made towards it - known as a balancing payment - and your first payment on account, which is an advance payment towards your next tax bill of half your previous year’s tax bill.
What if I miss the 31 January deadline?
You’ll be fined £100 if your tax return is up to three months late. If it’s later than three months, you’ll be charged up to £1,600 depending on the length of the delay.
If you’re late paying your tax bill, you’ll be charged interest on the payment from 1 February and if the tax is still outstanding 28 days after the deadline, a 5% surcharge kicks in. An additional 5% is charged on unpaid tax after six months, and again after 12 months.
Excuses for filing it late, such as "a rat ate my tax papers” and “my husband ran over my laptop” – which HMRC said it received last year – will not get you out of a fine. Neither will bounced cheques, or the fact you found HMRC’s online system too difficult to use.
However, HMRC says what may count as a reasonable excuse includes:
- Your partner or another close relative dying shortly before the tax return or payment deadline.
- An unexpected stay in hospital.
- You had a serious or life-threatening illness.
- Service issues with HMRC’s online services.
- A fire, flood or theft that prevented you from completing your tax return.
I need help with my self-assessment. How can I contact HMRC?
You can phone HMRC on 0300 200 3310.