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When can I submit my self-assessment?

If you are self-employed or run your own business, you will be required by law to submit a self-assessment tax return every year. Failing to do so, or not submitting this return before the end of the deadline, can leave you facing financial penalties.

This is not a situation that any freelancer or small business owner will want to find themselves in, but when should you submit your self-assessment return?

Basic information about self-assessment

Those who are likely to be required to complete self-assessment include people who are self-employed, company directors (unless the company in question is a not-for-profit) and those who earn money by renting out property for commercial or residential use. In each case, whether you actually have to pay any tax will depend on the amount of money you make for the year.

Before you can fill out the form, you will have to register for self-assessment, after which you will be sent a letter that contains a Unique Taxpayer Reference (UTR) needed to create your Government Gateway account. When you begin that process, a letter will be sent out that has the activation code to finish creating this account. Self-assessment covers the tax year, which is the 12-month period starting and ending 5th April.

When should the self-assessment be submitted?

There are hard and fast deadlines for when your self-assessment must be submitted, depending on how you choose to complete it. If you opt to receive and submit your tax return via the post, the deadline for completing it and getting it back to HMRC is the 31st October. On the other hand, if you prefer to fill it out and submit it online, you have until 31st January of the following year. Thus, the self-assessment deadline for the tax year 2018/19 will be 31st January 2020 as long as you’re happy to do it online.

Failure to submit a return by 31st January will mean an instant £100 fine, while you can also face further penalties of £10 per day for a 90-day period if you miss the 30th April extension. After that, the fines increase to £300, or potentially 5% of any tax owed, should that be a bigger sum.

As you can see, it’s not worth the financial headaches you’ll suffer if you miss the deadline. However, there are several reasons why you should look to get your self-assessment submitted as early as possible instead of waiting until the last minute.

It makes finding the information you need easier

Before completing self-assessment, you will need to have copies of all of your bank records, receipts and invoices for the tax year in question. Having to locate all of these with a deadline for submission looming is a recipe for stress, especially as you will still have to keep up with work on top of it. It makes much more sense to get the information together early – ideally in a period when you are not overly busy – and complete the form well in advance.

Furthermore, many internet banking services delete records of transactions after a year, meaning you may actually struggle to get the financial information you need if you leave it until the last minute.

It ensures that you can prepare for any tax bill

Although some freelancers and business owners have the financial skills to keep track of how much tax they will be liable for, this certainly does not apply to everyone. For many, receiving the tax calculation when filling out self-assessment can come as a shock, but by completing and filling out the form early you can use the greater period of time you will have until the payment is due to save funds towards it if you need to.

Submitting your self-assessment early does not mean that you will have to pay any tax due early as well. The tax bill will be due on the 31st January of the following year, whether you submit the return before that deadline or not – it is just that you will know much sooner how much you have to pay.

You may need help with it

If you are new to the process of completing self-assessment – or simply encounter an issue you cannot resolve for yourself – you may need help from HMRC before you can submit your return. The problem is that the personal tax helpline set up by HMRC for dealing with such enquiries is always overwhelmed by callers on 31st January and if you are one of the many (2.6 million last year) who leave it until the last minute, you could struggle to get through to anyone in time. It’s better to complete it early, when the helpline will be less busy should you need to use it.

You can relax and enjoy the holiday season

A survey that was carried out last year found that self-assessment was a stressor for over 50% of the small business owners who responded, but submitting the form early will get that worry out of the way and allow you to enjoy a relaxing break over the festive period. Having your financial house in order means you can savour the break and return to business recharged in the New Year.

It gives you time to deal with any problems

Hopefully there will not be any issues arising from your self-assessment, but if HRMC does raise any queries after it has been submitted, it will be better if you are not facing them with the deadline hanging over you as well. An early submission means that you can talk to advisors at HMRC and resolve any disputes well before the deadline.

There are dates for submitting self-assessment returns and stiff financial penalties for those who ignore them, but the smart option is submit early. If you employ an accountant to handle your tax, this will take the burden off your hands, but it is very likely that any good accountant will look to submit the return as early as possible so that you are well prepared for any eventualities.

Posted by Mark
April 27, 2019
Accountants

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