An estimated 11 million people need to file a tax return, and pay their outstanding tax bill, by 31st January or face potentially hefty fines for late submissions. However, an increasing number of different groups now required to file a report, one of the first questions to answer is not whether a home phone bill is considered a tax deductible expense, but are you even required to complete a tax return at all?
The self employed must submit tax returns every year, and they must be submitted by midnight on 31st October for paper submissions or midnight on 31st January for online submissions. Contractors also need to file returns, but there are many other groups of people that must also take part in the annual tax return filing.
If you earn any income outside of your salaried income, then this must be included in an annual return. So, even if you run an eBay business out of your spare room, write and submit articles to magazines, or you maintain a commercial website of any sort, then you will need to submit a return by the deadline or face late filing penalties.
Higher rate taxpayers that claim relief of pension submissions, and even parents earning £50,000 per annum or more and that claim child tax credits, are all likely to have to submit a self-assessment this month. For those that have full-time and salaried jobs, the last thing they want to have to consider when they get home from a long day at the office.
For many people, it isn’t just a case of filling in a page or two of forms, it means determining what needs to be included within the return, it means conducting research to find out whether any recent tax law changes are relevant to them, and it means hunting down and retrieving receipts, bank statements, and invoices.
Using a qualified accountant, with experience in tax returns and self-assessment tax laws, may seem like an additional expense, but it could end up saving you valuable time and money, help you to avoid penalties for missed submissions or late payments, and also ensure that you take full advantage of any tax breaks that exist – you don’t want to end up paying more than you need to, after all.
Considering the penalties for late payment can be considerable (a fine of up to 100% of the outstanding tax means that you could end up paying double the amount you initially owed), it is definitely worth ensuring that everything is in order and up to date.
HMRC do not consider uncertainty as a reasonable excuse for being late; neither will they take a lack of knowledge on tax laws as being an excuse for excluding information that should be included. The largest fines are reserved for cases where inspectors believe that a person has deliberately withheld information, intentionally paid too little, and has gone out of their way to fail to provide accurate information and payments.
For more information on tax returns or to speak to a specialist contractor accountant, do get in touch.