Money Saving Expert (MSE) has issued a reminder to taxpayers warning them that they have less than a month to fill out their online self-assessment tax return.
The deadline is January 31 at 11:59pm and if you do not complete it by this deadline, you could be faced with a fine - even if there is no tax to pay. The financial experts say that the fine is around £100 and to date, around 5.7 million people have yet to submit their tax returns, according to HMRC.
If you are self-employed, you will need to send HMRC an online tax return for the 2021/2022 tax year, which ended on April 5, 2022.
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The deadline to register for a self-assessment tax return was October 5, 2022 however if you register now, you should be ok so long as you file the tax return itself before the deadline. If this is your first time filing a return, you can register by visiting the HMRC website.
HMRC will set up your self-assessment online account and send you a letter with your unique taxpayer reference. This is a 10-digit code which you'll need the first time you log in. It can take up to 10 working days for you to receive your reference number so you are urged to register as soon as possible.
But who needs to submit one? Here's what you need to know.
You could get a fine even if you have no tax to pay
As well as a potential £100 fine, MSE state that you could face further penalties of £10 a day which are applied after three months, up to a maximum of £900.
They state: "After six months, you'll get a further penalty of 5 per cent of the tax owed or £300 (whichever is greater), which is repeated at 12 months.
"There are also extra penalties for paying the tax late – these are charged at 5 per cent of the unpaid tax after 30 days, six months and 12 months."
Who needs to submit a tax return?
If any of the following applied to you in the 2021/2022 tax year, you will need to submit one.
These include:
- You were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- You were a partner in a business partnership
- Your income was more than £50,000, and you or your partner claimed child benefit.
- You earned more than £2,500 from renting out property, or from other untaxed income, such as tips or commission.
- You earned more than £100,000 in taxable income.
- You earned £10,000 or more before tax from savings, investments, shares or dividends.
- You earned income from abroad, or lived abroad and had a UK income.
- You need to pay capital gains tax.
- You received income from a trust.
- Your state pension was more than your personal allowance and was your only source of income (unless you started getting your pension on or after 6 April 2016).
- HMRC has told you that you didn't pay enough tax last year (and you haven't already paid up through your tax code or via voluntary payments).
- You filed a self-assessment tax return last year (even if you didn't owe any tax). You'll need to file again this year unless HMRC has already written to you to say you don't need to.
Use the Government's free tool to check whether you need to file a tax return.
Covid-19 grants or payments
MSE warn that the period of 2021 to 2022 tax return covers earnings and payments received during the pandemic. As a result, if you meet any of the criteria outlined above, you'll also need to declare if you received any grants or payments from the Government's Covid-19 support schemes up to April 5 2022. This is because these are taxable.
It should be noted that the £500 one-off payment for working households receiving tax credits does not need to be declared in your self-assessment return.
These payments include:
- The Coronavirus Job Retention Scheme - This paid out non-repayable grants to employers, so they could continue to pay their staff.
- The Self-Employment Income Support Scheme (SEISS) - covering the following periods: 22 April 2021 to 1 June 2021, and 29 July 2021 to 30 September 2021. This paid out non-repayable grants to self-employed people who were financially impacted by the pandemic.
- Other Covid-19 grants and support payments - such as self-isolation payments, local authority grants and funding for the Eat Out to Help Out scheme.
You can find out more about tax online.
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