Personal Tax

If you have relatively straightforward tax affairs and already pay tax through PAYE (Pay As You Earn) you probably won’t need to complete a tax return.

But if you have income from self-employment or above a certain level you may need to complete one.

If you are self-employed, a partner in a partnership, a company director, a trustee, receiving foreign income or have complex tax affairs you will need to be registered for self- assessment and complete a tax return annually.

Self- assessment requires you to provide HMRC with details of your income, capital gains, and the tax allowances and reliefs you want to claim against your tax liability. HMRC will then use your figures to calculate your tax liability.

To minimize your tax liability and to maximize the effective use of legitimate allowances and reliefs, we would strongly advise using the services of a qualified professional like Baillie Accountants.

We’ll make sure that you do not pay any more tax than you need to and that your tax return will be submitted in a timely manner to avoid penalties and interest charges.

To register for self-assessment please click here;
http://www.hmrc.gov.uk/sa/register.htm

For rates and Allowances download our handy tax tables here.

Deadlines for sending in your tax return

31 October: paper returns

If you send a paper tax return it must reach HMRC by midnight on 31 October.

So for the 2012-13 tax year (ending on 5 April 2013), the deadline for paper returns is midnight on 31 October 2013.

There are very few exceptions. As an example, the deadline may be later if HMRC send you the letter, telling you to complete a tax return, after 31 July. In this case the letter will tell you the deadline – it is usually 3 months from the date of the letter. Or if you’re sending a Self Assessment return for a registered pension scheme or non-resident company, you can only send paper returns so the deadline isn’t until 31 January.

31 January: online returns

Your online tax return must reach HMRC by midnight on 31 January.

So for the 2012-13 tax year, the deadline for online returns is midnight on 31 January 2014. There are very few exceptions. As an example, the deadline may be later if HMRC sends you the letter, telling you to complete a tax return, after 31 October. In this case the letter will tell you the deadline – it is usually 3 months from the date of the letter.

There’s also an earlier deadline of 30 December if you want HMRC to collect any tax you owe through your tax code. You can ask for this if you owe less than £3,000. Please show this clearly on your tax return. HMRC will try to collect the tax due through your code, but they can’t always do so.

Penalties for missing the tax return deadline

Length of delay Penalty you will have to pay
1 day late £100.00 This applies even if you have no tax to pay or have paid the tax you owe.
3 months late £10 for each following day – up to a 90 day maximum of £900. This is as well as the fixed penalty above.
6 months late £300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above
12 months late £300 or 5% of the tax due, whichever is the higher.In serious cases you may be asked to pay up to 100% of the tax due instead. In some cases the penalties can be even higher than this.These are as well as the penalties above.

Penalties for paying late

If you don’t pay the tax you owe for the previous tax year on time, you’ll have to pay a penalty after 30 days and the longer you delay, the more you’ll have to pay. So it’s important to pay the tax as soon as you can.

Length of delay Penalty you will have to pay
30 day late 5% of the tax you owe at that date
6 months late 5% of the tax you owe at that date. This is as well as the 5% above.
12 months late 5% of the tax unpaid at that date. This as well as the two 5% penalties above