Self Assessment Tax Returns
This is a quick factsheet giving you all the information you should need about self-assessment tax returns in the UK.
The tax year runs from the 6th of April to the 5th of April the following year. The HRMC will issue tax returns to individuals that it is aware of who need to submit one. If an individual completes tax returns online, then the HMRC will send them a notice advising them that a tax return is due. If you have not received a notice and are unsure if you need to submit a return, see our guide on who needs to submit a self-assessment tax return.
There are 2 different dates for the submission of tax returns depending on if you submit online or submit a paper return. If you submit a paper return these need to be filed typically by the end of October following the deadline. If you submit your return online, you will have until the 31st of January of the year following the fiscal year.
What happens if you don’t submit my tax return on time?
If people don’t get their returns in on time HMRC imposes penalties. Firstly, there is a £100 penalty which will be charged on the day following the due date. This penalty will be incurred even if you have no tax liability. Additional penalties will then be incurred depending on how late your return is due as follows:
- Over 3 months late you will incur a £10 a day penalty up to a maximum of £900
- Over 6 months late an additional £300 or 5% of the tax due if higher
- Over 12 months late a further £300 or a further 5% of the tax due if higher.
In certain cases which the HMRC deem to be of particular importance, the penalty can be up to 100% of the liability.
How do I calculate my income tax payable?
This is what you employ an accountant for. Unfortunately, there are too many potential variables to this question to give an answer here. Once you supply your books and records to your accountant, they will be able to calculate your tax liability for you based on your taxable income and available tax allowances and tax credits.
Given the deadlines set out above, it is important you supply your books and records to your accountant early to give them enough time to submit your return. Bear in mind they will be the busiest right before the deadline.
What if there are problems with my tax return?
If HMRC detects problems with your return they can enquire into it by giving written notice. Generally, if the HMRC is going to make an enquiry into a tax return they will do this within 12 months however they are not obliged to do.
To be clear, HMRC will not query any entry on your tax without opening an enquiry. They will usually open an enquiry if they suspect your tax return is not correct and that you have underpaid tax. However, don’t worry too much as it does not necessarily mean you return is wrong.
What records do I need to keep?
If the HMRC does open an enquiry you may need to supply relevant documents to verify your tax return. You are expected to keep records of all income, expenditure and any reliefs claimed. Generally, expenses tend to be more contentious, so you are required to keep proof of expenditure and that it was incurred in the line of business. Documents received to verify income should also be retained. The HMRC requires that you maintain books and records for at least 5 years.