Self Assessment tax return deadlines and penalties

Late submission or payment of self-assessment tax return deadlines and penalties can be a costly mistake for sole traders and businesses.

HM Revenue and Customs (HMRC) created the Self-assessment model to allow people to file tax returns and disclose their taxable earnings. This means tax can be charged correctly without investing in a complicated way to collect data from individuals.

In order to ensure tax is paid on time, a number self-assessment tax return deadlines and penalties are set.

How do you register for self-assessment tax returns?

You must register with HMRC if you have taxable income that makes you eligible for self-assessment. The deadline for this is the 5th of October in the year following the end of the tax year that your eligible income falls into.

For example: If the income was between the 6th of April 2022 and the 5th of April 2023, you will need to register with HMRC by the 5th of October 2023.

If you are unsure of whether or not you need to register for self-assessment, you can check out our previous blog post. Or look on the HRMC website. Alternatively, you can call HMRC on 0300 200 3310.

What is the penalty for failing to notify HMRC you need to complete a self-assessment tax return?

The penalty for failing to notify HMRC that you need to complete a self-assessment tax return is calculated from a percentage of the potential lost revenue. Or how much tax you would have been charged had you notified them on time and completed a tax return.

This can range from 0% to 100% depending on factors such as; whether it was deliberate and, how much you help in trying to resolve the matter.

For more information on penalties for failure to notify HRMC about tax please read this page.

How do you complete your self-assessment tax return?

There are two ways to complete a self-assessment tax return;

• with a paper / postal form
• electronically via the HRMC website

If you file your return via the paper form and post this, the deadline is the 31st of October in the year following the end of the tax year you are liable to pay for.

For example: For the tax year ending on the 5th of April 2024, you will need to file your tax return by the 31st of October 2024.

If you file your return electronically, the deadline is the 31st of January following the tax year. In the above example, it would be the 31st of January 2025.

If you file electronically, you have three additional months to complete and file your tax return. Most accountants (including ourselves) opt to file electronically to help reduce the likelihood of clients having a penalty for late submission. As well as it being more environmentally sound.

What are the self-assessment tax return deadlines and what are the penalties for filing your tax return late?

• 1 day – 3 months late = penalty of £100
• 3 months – 6 months late = the penalty will increase by £10 per day up to £900
• 6 months – 12 months = a further £300, or 5% of tax due (whichever is greater)
• 12 months late = another £300 or 5% of the tax due is added – meaning the total penalty for twelve months would be at least £1,600

The above penalty can be further increased if it is twelve months late and deliberate. This could be by up to 100% of any tax due or £300, whichever is higher.

Paying your self-assessment tax

Regardless of whether or not you complete a return; paper form or electronically. The tax due should be paid by the 31st of January following the end of the tax year. This is the same deadline as completing and submitting an electronic tax return.

If your tax is high enough, you will also have a payment on account for next year due at the same time. Followed by a second payment on account due on the next 31st of July.

For example: Using the example of the 5th of April 2024 tax year. This would be the first payment on the 31st of January 2025, and the second on the 31st of July 2025.

What are the penalties for paying self-assessment tax late?

If tax charges are not paid on time a penalty will be issued. After thirty days an additional 5% of the total tax due will be added. If the tax charges are paid later than six or twelve months a further 5% of the tax due will be added to the penalty.

These penalties are in addition to the late filing penalties. Meaning failure to file on time can soon build up to a substantial cost for you and your business.

If you have any questions about the above, or anything to do with sole trader accounting, or would like some help to ensure your tax return is completed correctly, and on time – please get in touch.