If you are self employed and not a Limited Company you will have to complete a Self Assessment tax return for your trading results up to 5 April each year.
In order to complete this return you will need to maintain accurate records of income and expenditure that relate to the business to 5 April each year.
Tax returns covering income for the year ending 5 April each year are issued on or after 6 April, and will consist of a main tax form and backing schedules. Your tax office will send out what they think are the relevant schedules. If you need other schedules you will have to ask for them or you can download them in PDF format. The completed full return has to be submitted to HM Revenue & Customs by 31 October for the paper return or by 31 January in the following year for the online return.
If you don’t want to work out your own tax bill, you must send the tax return in by 30 September. However, you should note that your return must be completed as far as the total income on which tax has to be paid. Figures must be given for every item, even if only estimates. It is not possible to enter question marks or leave the tax inspector to decide whether an item is taxable or not. The only section that can be left for the tax office to complete is the actual calculation of the tax due on your total income.
If you have taxable income or capital gains for the year and have not received a tax return, you must advise your tax office by 5 October at the latest. There is a fixed penalty if you fail to do so.
There are automatic penalties for late filing of tax returns. Failure to submit the tax return by 31 January incurs a £100 penalty, even if you have no tax to pay, or you have paid any tax owed on time. After three months, a penalty of £10 is charged for each additional day, up to maximum of £900 for 90 days. Returns that are filed six month late are then charged the highest of £300 or 5 per cent of the tax due, this penalty is repeated again if the return is then filed 12 months late. In serious cases you may be asked to pay 100% of the tax due as a penalty for returns that are 12 months late.
If you would like us to maintain your records for completion of Self Assessment please contact Dragon Accounting Services in Swansea to set up an initial free meeting to discuss your business and individual requirements.