There are fewer than sixty days to go (and only 42 are working days).
Midnight on 31st January 2025 (it’s a Friday) is the latest time by which HMRC can receive a completed and signed tax return. They must also receive full payment for any tax you owe for the tax year from 6th April 2023 to 5th April 2024.
HMRC is on your case…
Having triggered the ‘less than sixty days to go’ marker, expect a flurry of reminder emails from HMRC. These will include invitations to digest webinars and guides, submit online enquiries and use the help section of their website for every tax topic imaginable.
The emails will continue to offer business owners support and guidance until HMRC receives the completed online tax return and any tax payment due.
Late submission? Expect a fine
You can submit after the deadline, but there’ll be a late submission fine to pay and daily interest accrues on any outstanding tax you owe.
Submissions after the 31st January deadline incur a flat £100 fine, even if you’re just one day late and have no tax to pay!
Three months later, there’s another £100 fine applied and a complicated arrangement of interest and further fines on any outstanding tax due. These fines increase if tax payments are still outstanding at six months, twelve months and beyond.
Late payment of tax owed, expect more, and more fines
HMRC interest rates are set in legislation and linked to the Bank of England base rate. There are two rates: late payment interest, set at base rate plus 2.5% and repayment interest, set at base rate minus 1%, with a lower limit of 0.5% (known as the ‘minimum floor’).
HMRC has a calculator tool for working out your penalties for late tax returns and tax payments.
https://www.gov.uk/estimate-self-assessment-penalties
There’s no dodging the self-assessment tax return
Even if you had nothing to pay last year and believe you’re fully paid or have no tax liability for the 2023-24 tax year, you still have to submit a tax return by law.
Don’t let procrastination catch you out
Excellent sources of further information include our previous blog posts on the topic, the link to sign up for HMRC email notifications and the HMRC self-assessment online guides.
https://subscriptions.hmrc.gov.uk
https://www.gov.uk/government/publications/self-assessment-tax-return-sa100
Prioritise time to get your information ready
It’s never too late to get organised, it’s all about prioritising your time.
One of the most time-consuming aspects of putting a self-assessment tax return together is gathering all the relevant basic information.
One of the best and most useable ways is to set up and maintain digital tax records. A lot has been spoken about ‘Making Tax Digital’ (MTD) and we’ll be covering this topic in more depth in an upcoming blog, but for now, this is what you need to be aware of:
Making Tax Digital ITSA (Income Tax Self-Assessment)
The next phase for MTD will apply to sole trader businesses and landlords, and will be introduced in two phases:
- From April 2026, for those with qualifying income over £50,000
- From April 2027, for those with qualifying income over £30,000
Get organised, or get help
Whatever method you currently use, even if you’ve not got digital record keeping, getting your ‘books’ up-to-date is the key.
The same goes for your personal tax matters. You wouldn’t be the first person to battle through the business sections of the tax return, only to be floored by personal pension contributions, bank interest, maintenance payments, student loans, etc.
Many people are too busy, or just not inclined, however well-meaning, to stick to a routine of recording and organising their business and personal finances.
Your options:
There are options you can explore to let software or someone else take some of the strain, but again, you need to act now!
Technology: There’s a huge choice of software, phone apps, and other gizmos to help you keep on top of capturing and organising your business expenditures. If you’re out and about, a phone app that scans receipts and sends them to synchronised folders on your phone and your business device could save you a lot of time and work.
Outsourcing to a professional bookkeeper: If you prefer a personal approach, engaging a bookkeeper could be the answer. Again, get on with finding the right person you can trust and work with. Bookkeepers (like accountants) are busy at this time of year, especially the ones with professional pedigrees and glowing testimonials!
Engage an accountant: An accountant isn’t just for your SA tax return. Professional accountancy practices have the scale and experience to deploy whatever resources you need, as you need them. Most businesses have periods of higher financial activity than others, and an accountant can respond to your peaks and troughs. They can handle the day-to-day, the month-end, the quarterly VAT return, the six-monthly accounts and of course, the end-of-year and tax returns and anything else that crops up.
We’re here to help…
Rackham’s Accountants is always happy to talk to clients about their options, advise on MTD, and support new businesses towards making a hassle-free and no-penalty self-assessment tax return.
Call 01482 631700, or use our website contact form: rackhamsaccountants.co.uk/contact-the-team
