Do the words "self assessment tax return" strike fear into your heart? If you're self-employed, they probably do.
In this post, we’ll debunk five common myths about self assessment tax returns, so you can complete your filing with confidence, save money and avoid fines.
False. You may still have to complete a self assessment tax return, even though you’re not self-employed. Here's when this might happen:
You can check whether you need to complete a self assessment tax return using HMRC's handy checker.
You may still need to submit a self assessment tax return, even though your income is below the thresholds for income tax and National Insurance
If your circumstances have changed and you believe you don’t need to file, it’s still a good idea to contact HMRC to make sure. HMRC may fine you if you don’t complete one or confirm you don’t need to. So better safe than sorry.
Yes. There’s an automatic fine of £100 if you miss the deadline for submitting your tax return. And there are further fines if you don’t pay your tax bill on time.
However, you can appeal if you feel you have a ‘reasonable excuse’. Reasonable excuses include:
You may think you need to pay an accountant to fill your return, but for many people, this isn’t necessary. Are your tax affairs straightforward? Have you kept good records? If so, you should be able to complete the return yourself.
Of course, it’s still worth talking to an accountant to find out whether you can deduct certain expenses or are eligible for a refund. If you’re self-employed, it’s also worth investing in accounting software to keep track of your sales and expenses. This is will make completing your tax return much easier.
Yes. The deadline for paper tax returns is midnight on 31 October. And unless you have a ‘reasonable excuse’ for your late submission, HMRC will fine you £100 for sending a paper return anytime after this date.
But you can avoid the fine (and get a deadline extension to boot) really easily, too. Simply register to submit your tax return online. That way, you’ll have until 31 January to send in your return.