If you’re new in business, you need to be aware that the deadline for self-assessment with HMRC is fast approaching.
31st January 2022
31st January 2022 is the deadline for anyone who needs to complete a self-assessment tax return. This is the deadline to submit full information to HMRC and pay any tax owing for the tax year from 6th April 2020 to 5th April 2021.
Get yourself organised; it’s not too late
If you’ve not already thought about this, it’s not too late to get organised. These are the things you should do straight away.
If you’re submitting a self-assessment tax return online for the first time, you’ll need to register on the HMRC website https://www.gov.uk/self-assessment-tax-returns
Set up your *Government Gateway user details for your online tax account (this is not the same as your unique taxpayer reference (UTR) number or your national insurance number).
Self-assessment online
New online accounts are easy to set up. Still, you may have to wait up to 10 days to receive an activation code, particularly at busy periods (like now). If you’ve had an account number allocated in the past and have lost track of it or your password, you should not set a new account up but retrieve your existing account by going to https://www.gov.uk/log-in-register-hmrc-online-services/problems-signing-in
*[Rackhams Accountants has a gateway with HMRC. We submit returns directly to HMRC on behalf of our clients, so they don’t need to set up a personal Government Gateway.]
The next thing you need to do is gather all of the information you’ll need together.
This is probably the most time-consuming and challenging part of the operation (particularly if you have complex financial affairs or haven’t kept your books up-to-date).
Start to get everything together:
Financial gains:
- Details of your income from employment and self-employment (you can be both at once). During the tax year, April 2020 to April 2021, you may have received grants or loans relating to the Covid 19 pandemic. These must be declared as income.
- Income of more than £1,000 from any other source, including rental income from property you let out, selling items online or casual work.
- Interest and dividends earned on savings and investments,
- Any financial gifts you’ve received, including from probate or inheritance
- The profitable proceeds from selling an asset. This can include property or even a valuable item such as a classic car or an item of jewellery.
- Income from any overseas source
Financial losses:
- All expenditure relating to running a business. Specific rules apply; refer to HMRC online guides https://www.gov.uk/guidance/help-and-support-for-self-assessment YouTube videos and the HMRC helpline for specific advice 0300 200 3300. You’ll also need to provide proof that any money was spent in the way you say it has, so that’s receipts, bank statements etc.
- Interest on business loans
- Any pension contributions you’ve made
- Your national insurance contributions
- The money owed to you – again, you’ll need to prove this
- Any other significant financial losses, with proof
The form’s designed to help you, not trip you up
Once you’ve got everything together and your online self-assessment account up and running, you need to put the correct figures in the right boxes where prompted.
Every question has a further help option where applicable. The site will prompt you if you’ve filled the information in the wrong format required.
The site will remind you to save your information as you go along. You can also leave the website to complete your return or go back to an earlier question.
No maths involved!
You don’t have to calculate the amount of tax you owe; it is done automatically for you, with a breakdown of why you owe the figure quoted.
Finally, you get to check over everything again before signing the return digitally and submitting it to the HMRC along with any tax you owe by midnight on Monday 31st January 2022.
If you miss the deadline or submit an incomplete form, you can expect:
£100 automatic non-negotiable fine
A £100 fixed fine if you file your return up to three months beyond the deadline, even one or two days late, this is irrespective of whether you owe any tax or not. If you owe tax, there’s daily interest to pay as well.
If your return is more than three months late, or you pay any tax owing late, the fine will be more significant plus interest calculated daily. (There are further fines for submitting six months late or more).
Who pays?
You do! And that includes every partner if your business is registered as a partnership.
Who can help?
If you need help and are not already receiving professional support with your tax responsibilities from either a bookkeeper or an accountant, we can help.
We’ll never turn anyone away – but help us to help you!
We’re swamped, as you can imagine. Still, we’ll never turn anyone away, even if it’s for a piece of advice or information, where to get help.
Everyone is busy at this time of year, but the worst thing you can do is ignore the approaching deadline and hope it goes away – believe us, it never does!
Rackhams Accountants 01482 631700
