The deadline for submitting your Self Assessment tax return online is on January 31st every year. If you missed this deadline for reporting your income for the 2022/23 tax year, it’s important to send your tax return as soon as possible. Acting promptly may help reduce the late filing penalties imposed by HMRC.
In this article, we outline the necessary steps to take if your tax return is overdue. Additionally, we delve into the penalties incurred when missing the Self Assessment filing deadline and failing to pay your tax bill promptly. If you find yourself unable to settle your bill in full, there are alternative options to consider.
Submit your overdue Self Assessment tax return without delay.
While missing deadlines can be stressful, remain calm and prioritize completing your SA100 form either online or through postal mail as soon as possible. Opting for online filing is recommended for its ease and efficiency, reducing the likelihood of errors. No prior communication with HMRC is necessary; proceed to file your tax return as usual.
Before you can submit your initial tax return, it’s essential to be enrolled in the Self Assessment system. The registration cutoff is October 5th, which is nearly four months before the tax return deadline. If you register after this deadline and also file your tax return late, you may incur a penalty for failure to notify HMRC in time.
If You Typically Submit a Paper Tax Return
If you fail to meet the October 31st deadline, you have the option to file it online within an additional three months before it’s considered late. Paper returns are required earlier due to the longer processing time they entail compared to online submissions.
As long as you submit your return online by January 31st, you won’t face a late filing penalty. However, if you submit a paper return after October 31st, standard penalties will apply for filing late.
When the Filing Deadline Differs:
If you wish for HMRC to deduct your Self Assessment tax from your PAYE tax code, your online tax return must be submitted by December 30th instead of January 31st.
For non-resident companies or trustees of registered pension schemes, a paper tax return must be sent by January 31st (three months after the standard paper return deadline for Self Assessment). Online submissions are not permitted.
Late Filing Penalties for Self Assessment:
If your Self Assessment tax return is up to three months overdue, you’ll incur a £100 late filing penalty. Further charges apply for longer delays.
HMRC also imposes penalties and interest for late tax bill payments, with the payment deadline coinciding with the online filing deadline, ending at midnight on January 31st.
To estimate penalties for late filing or payment, HMRC offers an online calculator. However, it doesn’t consider factors such as payments already made, outstanding interest or penalties from prior years, or any credits from previous tax periods.
If you have a valid reason for the delay, such as bereavement, illness, technical issues, or other exceptional circumstances, you can appeal against the penalty. HMRC considers a reasonable excuse as any circumstance that prevented you from meeting your tax obligations despite taking reasonable care.
After providing evidence of your reasonable excuse, submit your overdue tax return and pay any outstanding tax promptly.
The procedure for appealing a penalty depends on whether it pertains to an individual tax return or a Partnership Tax Return. For individuals, you can appeal online or use form SA370. Partnerships should use form SA371.
When completing the form, ensure to include the following details:
- Name and address
- Unique Taxpayer Reference (UTR)
- Date of penalty issuance by HMRC
- Date of tax return filing
- Specific penalty (or penalties) you’re appealing
- Reason for the appeal
It’s crucial to have submitted the tax return before initiating an appeal. HMRC may not process your appeal until the return is filed.
If your appeal is successful and no outstanding tax remains, HMRC will reimburse the penalties paid, along with any accrued interest.
Unable to Cover Your Self Assessment Tax Bill?
You may be able to set up a ‘Time to Pay’ payment plan with HMRC if you cannot afford to pay your tax bill. This arrangement will enable you to spread the cost of your latest Self Assessment bill over a number of months, giving you more time to pay and get back on track.
You can set up a payment plan online if all the following apply:
- You owe £30,000 or less
- You don’t have any other payment plans or debts with HMRC
- You’ve filed your latest Self Assessment tax return
- It is less than 60 days since the payment deadline passed
You can choose how much you would like to pay immediately (if you can afford to do so) and how much you’d like to pay each month. To set up a payment plan, you will need:
- Your Unique Taxpayer Reference
- Your UK bank account details (to set up a monthly Direct Debit with HMRC)
- Details of any previous payments that you have missed
- Details of your income and spending (to work out how much you can reasonably afford to pay each month)
HMRC has a helpful YouTube video that shows you how to set up a Time to Pay payment plan online.
If you’re unable to establish a payment arrangement via the internet
If you can’t arrange a payment plan online, reach out to HMRC directly. They’ll request the following details:
- Explanation for inability to pay tax bill
- Monthly repayment amount you can afford
- Any other outstanding taxes
- Income details
- Monthly expenses
- Savings or investments status
If you have savings or assets, HMRC typically expects you to utilize them to cover as much of the tax bill as feasible.
If you’ve sought independent debt advice, such as from Citizens Advice or StepChange, you may possess a ‘Standard Financial Statement’. HMRC acknowledges this statement as proof of your monthly income and personal expenditures.
Once you’ve settled all owed taxes, it’s advisable to contemplate establishing a Budget Payment Plan with HMRC. This allows for consistent weekly or monthly payments towards your forthcoming Self Assessment tax bill.
Does Late Filing Information Get Disclosed Publicly?
HMRC maintains confidentiality regarding your Self Assessment tax returns and bills. Rest assured, this information will not be shared with clients, lenders, credit reference agencies, or any other parties. Therefore, it should not affect your personal or business reputation.
Can Tax Debt Impact My Credit Score?
Having a debt with HMRC, whether for taxes or penalties, does not influence your personal credit score. This is because HMRC has not extended credit to you; you did not borrow the money from them.
Therefore, any debts owed to HMRC do not adversely affect your financial standing or your ability to obtain credit.
However, if these debts remain unresolved and you do not engage with HMRC or attempt to repay them, the consequences may vary. HMRC may:
- Employ a debt collection agency to address your debt
- Recover tax debts directly from your wages or monthly pension payments
- Seize and sell your possessions (except in Scotland)
- Access funds directly from your bank account or savings (except in Scotland)
- Initiate legal action or bankruptcy proceedings
By promptly contacting HMRC and attempting to negotiate a resolution, you can avoid these potential outcomes. HMRC only utilizes its tax debt enforcement powers when individuals or businesses intentionally evade paying their tax obligations.
Key Dates to Remember for Self Assessment
The filing and payment dates for Self Assessment remain consistent each year, following the conclusion of the tax year. This structure allows for ample time to prepare your tax return and settle any outstanding taxes owed.
The tax year spans from April 6th of one year to April 5th of the subsequent year. Currently, we’re in the 2023/24 tax year, concluding on April 5th, 2024.
Ensure to mark these dates in your calendar to stay on top of your tax responsibilities in upcoming tax years:
- Postal filing deadline for Self Assessment tax return: Midnight on October 31st
- Online filing deadline for Self Assessment tax return: Midnight on January 31st
- Payment deadline for tax bill: Midnight on January 31st
- First ‘payment on account’ deadline: Midnight on January 31st
- Second ‘payment on account’ deadline: Midnight on July 31st
For the ongoing 2023/24 tax year, the deadline to submit your tax return is October 31st, 2024 (for paper returns) or January 31st, 2025 (for online returns). Any taxes owed for this period must be settled in full by January 31st, 2024.
If your previous tax bill amounted to over £1,000, you might need to make a first payment on account by January 31, 2025. Subsequently, a second payment on account will be required by July 31, 2025.
Many individuals find themselves unprepared for these payments on account, so it’s essential to exercise caution and ensure you’re setting aside enough funds each month to cover your tax liabilities. If you prefer not to establish a Budget Payment Plan with HMRC, consider placing the funds in a high-interest savings account, readily available when it’s time to settle your Self Assessment bill.