With Christmas and New Year festivities over, now is a good time to sit down at the kitchen table and tackle your self-assessment tax return.
Failure to meet the January 31 deadline will result in a £100 fine and interest of 6 per cent on any tax owed.
Almost half of the 12million people who must file a self-assessment return for the tax year ending April 5, 2022 have yet to do so.
‘Time to pay’ arrangement allows you to spread the tax owed over 12 monthly instalments
Late filers and payers will be hit with further penalties if they delay until March, equivalent to 5 per cent of the tax owed.
Sarah Coles, personal finance analyst at wealth manager Hargreaves Lansdown, says the 5 per cent penalty can be avoided by setting up a ‘time to pay’ arrangement with HM Revenue & Customs.
This allows someone to spread the tax owed over 12 monthly instalments, subject to a maximum of £30,000.
Coles adds: ‘If you prefer to file paper tax returns, you are already too late – the deadline was October 31. If this is your first time filing online, you must register for a ten-digit unique taxpayer reference code – and this can take ten working days to arrive.’ The code can be ordered via Gov.uk.
Those who bury their heads in the sand are warned that the taxman will not stop chasing them.
On May 1, you must pay an extra £10 a day fine that can be levied for a maximum 90 days – so a further £900 – if you have still failed to file your tax return. #
Additional fines are levied six months and a year after the initial January 31 deadline.
If you are unsure whether you need to file a tax return, contact Revenue & Customs on 0300 200 3310 or visit Gov.uk/contact-hmrc and go to the self-assessment link.
