Self Assessment Tax Return: A Legal Guide

Filing your Self Assessment on time is crucial, as HMRC promises an instant £100 fine for any late submissions. Patrick Cannon, leading UK tax barrister, explains for GoSimpleTax the legal points to keep in mind while…

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Last Updated: 26th May 2022

Filing your Self Assessment on time is crucial, as HMRC promises an instant £100 fine for any late submissions. Patrick Cannon, leading UK tax barrister, explains for GoSimpleTax the legal points to keep in mind while filing your Self Assessment and paying your taxes.

Don’t be late filing your tax return and paying your tax

With the busy and often chaotic lives we lead it is easy to leave filing your Self Assessment tax return and paying your tax until the deadline of 31 January.

But, as you will have missed the deadline of 31 October to file a paper return, you can only file online with HMRC using your Self Assessment account, if you have one. If you don’t you will need to create one and this should be done well in advance of 31 January as it can be fiddly and delays may occur. If you have not sent a return online before then when you register with them, HMRC will send you a letter with your 10-digit Unique Taxpayer Reference (UTR) and set up your account for the Self Assessment online service. You then have to wait for a letter with your on-line activation code:

This all takes time, of course, and is best done well in advance of the filing deadline to avoid the risk of a late submission.

Whether or not you already have an online account, you should gather all the information you will need to put into your tax return and this includes your P60 record of earnings and tax paid if you are employed, your accounts if Self Employed, records of dividends received and interest from savings accounts plus gains and losses on assets disposed of in the tax year.

Using a service such as GoSimpleTax will help you to collate everything you need to submit your Self Assessment and make it as painless and as easy as possible.

Late filing and payment penalties

There is an automatic penalty of £100 for late filing of up to 3 months and then £10 per day for the next 3 months and then the greater of 5% of the tax due or £300. This applies even if no tax is due.

Late payment of your tax incurs a penalty of 5% after 30 days, then 5% after 6 months and 5% after 12 months unless a time to pay arrangement has been agreed with HMRC (on which interest will be charged):

Make sure your Self Assessment tax return is accurate!

The importance of getting all you tax records together is underlined by the fact that there are serious tax-geared penalties for errors in a tax return when an error is classed as careless or deliberate.

These penalties are generally between 30% and 200% of the tax missed but with reductions for disclosure. Of course, serious dishonesty may get you prosecuted for tax evasion and lead to fines and jail time.

Don’t be tempted

Be honest even if it involves paying more tax than you feel is fair. “Forgetting” about that cash bonus, or the property you sold at a profit or that you “thought” the gain on the sale of a house was exempt when you were really a serial buyer and seller of property and so trading is a terrible idea and HMRC have increasingly sophisticated ways of finding out.

Once they get their teeth into you they rarely stop so don’t be someone with something to hide from them.

How long to keep your tax records?

Keep in mind that HMRC may select you for a check of your tax return. Generally you are required by law to keep your supporting records for 22 months from the end of the tax year that the return is for. So for example if you file your 2018 tax return online by 31 January 2019 you should keep your records until the end of January 2020 in case your receive an enquiry from HMRC.

The retention period is longer for business records and you must keep them for 5 years from the filing deadline so in the case of a 2018 return filed by 31 January 2019 the records must be kept until the end of January 2024. If an enquiry is opened within these periods then obviously you should keep the records until the enquiry and any related tax appeal is resolved.

Making it easier on your self

If filing taxes isn’t your favourite task, and if you’re not confident that you can get everything in order ahead of the Self Assessment deadline, then do consider using a tax Self Assessment software supplier to assist you such as GoSimpleTax This will help you avoid missed deadlines and mistakes and generally make managing your tax affairs much easier!

This guest post was written for GoSimpleTax by Patrick Cannon, leading tax barrister. Based in London, Patrick is the author of a number of acclaimed works such as Tolley’s Stamp Taxes and The Gaar: A Practical Approach. Having represented multiple cases throughout his years, Patrick is well equipped in his knowledge of the field of tax and is always happy to offer advice when it comes down to the matter.

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Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.

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