With just over a month left to pay your self-assessment tax bill, here’s everything you need to know to get it sorted ASAP.

Self-Assessments are used by HM Revenue and Customs (HMRC) to collect Income Tax.

For most, this is deducted automatically from wages, pensions and savings. But people and businesses with other income must report said income in a tax return. This includes COVID-19 grants and support payments.

How do I know if I need to file a tax return?

By now, no matter the size of your business, you should have registered for your tax return self-assessment, if during the last tax year (6th April 2021 to 5th April 2022) you were self-employed as a sole trader that earned more than £1,000 (before subtracting tax-relief deductions) or if you were a partner in a business partnership.

If you’re unsure of whether this applies to you, HMRC provides a self-assessment eligibility calculator, so that you can see if you need to file a tax return for 2021-2022.

Why do I have to pay?

Tax returns are not voluntary, and have to be completed no matter what.

As a new business and did not send an online return last year, allow extra time (up to 20 working days) as you’ll need to register first.

You’ll need to register through the HMRC website, but there are different ways to register if you’re:

Staying ahead

It makes much more sense to stay on top of these things as they go, so even if you don’t need to submit or pay for the last tax year, it makes sense to get registered now so you are prepared for next year.

Furthermore, you should keep records as current as you can. For self-employed business owners especially, if your books are up to date, you will have a better understanding of the financial standing of your business.

This means you will be able to put money away for the self-assessment at the end of the year.

‘Payments on Account’:

There is also usually a following secondary payment on 31st July to make advanced payments. These are known more commonly as ‘Payments on Account’, which are advance payments towards your tax bill that are made twice a year. Usually on 31st January and 31st July.

What are the deadlines I need to know?

The deadline to register for the last tax year passed on 5th October 2022, and paper tax returns should have been submitted by 31st October 2022.

However, if you haven’t done so already, you can still submit your tax return online and pay the tax you owe to HMRC, as the deadline for both of these requirements is midnight on the 31st of January 2023.

Instances in which the deadline is different:
  • HMRC may have written to you to give different deadlines. In this case, your assigned deadline applies.
  • If you are eligible, you may have submitted your return in time for 30th December 2022.

In such cases, HMRC will automatically collect tax from your wages and pension and must receive a paper tax return by 31st January 2023 if you are a trustee of a registered pension scheme or a non-resident company.

Please note that in this case, you cannot send a return online.

  • If your partnership’s accounting date is between 1st February and 5th April and one of your partners is a limited company, the deadline for returns is different.

Online: 12 months from the accounting date.

Paper: 9 months from the accounting date.

Late payment penalties

Perhaps the most obvious reason to stay on top of this process, is that there are fines for lack of payment.

If your tax return is up to three months late, you will have to pay a late filing penalty of £100. If it is later, or you pay your tax bill late, you will have to pay more and will be charged further interest on late payments.

This amount can be estimated on the HMRC website.

You can appeal these penalties if you have a reasonable excuse such as:

  • The death of a partner or close relative – provided this was shortly before the tax return or payment deadline.
  • Fire, flood or theft that prevented you from making the deadline.
  • Serious or life-threatening illness.
  • Postal delays that you could not have predicted.
  • Computer software failure just before the preparation of your online return.

It’s better to make your payments whilst you have time, rather than suddenly come to find you have to shell out even more for overdue tax returns in the new year.

How Rosemary Bookkeeping can help

There’s a lot to account for when figuring out your tax return payments, and not much time left to sort it before the new year. Your friendly, local Rosemary Bookkeeper can help.

Outsourcing your books to Rosemary means:
  • You receive expert help and support properly and promptly pay your tax return for January 2023
  • Your books are done regularly. So, you can see what is going on in your business
  • You don’t have to spend your valuable time doing the books, so you can do things more beneficial to your financial income
  • No additional staff. You only pay for the work done
  • You don’t have to do a job you loath

Want help with your January self-assessment tax return?

Leaving your assessment to Rosemary leaves you with a clear mind and the space to spend your holidays free of worry, and get on with doing the business you love.

If you think it’s time to outsource your bookkeeping, find your nearest Rosemary Bookkeeping business to see how we can help you today.