How to get your online self-assessment tax return right

Emma Lunn
by Lovemoney Staff Emma Lunn on 31 December 2013  |  Comments 2 comments

With the self-assessment tax return deadline looming, we look at how to avoid a nasty fine.

How to get your online self-assessment tax return right

The deadline for paper tax returns passed on 31st October 2013 for the tax year 2012-13, but taxpayers who need to file a self-assessment return can still file online up to the end of January.

And if you're going to do so, it pays to get your skates on. Here's what you need to know.

Fines

There is a £100 fixed penalty for submitting your tax return late, even if you have no additional tax to pay. Previously the fine was cancelled if no tax was unpaid at 31st January.

If the return is more than three months late there is a £10 daily charge for up to 90 days – so fail to file until the end of July and you’ll be fined £1,000 (£100 original fine + £900 daily charges).

The subsequent, further fixed penalties have been replaced by a sliding scale starting at £300, depending on the tax owed and the length of delay before payment is made.

After six months, a further penalty of 5% of the tax due or £300, whichever is greater, is levied and after 12 months, another 5% or £300 charge, whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due.

There are also additional interest penalties for paying tax late: 5% of the tax unpaid at 30 days, six months and 12 months.

Paying tax

A payment on account (POA) may also be due on 31st January 2013. POAs are payments made by the taxpayer in advance to cover their tax liability for next year and are payable in January and July.

They are designed to ease cashflow and each of them is typically half of the previous year’s tax liability – although they can be reduced if you are earning less than previous years.

Enjoy tax-free returns from the stock market

Get organised

Make sure you don’t leave it to the last minute to complete your online return, especially if you’re filing online for the first time.

The HM Revenue & Customs (HMRC) online system is designed to speed things up and make it easier for people to submit their tax return, but to do so you need a user ID and an activation PIN. You can apply for these online. To do so you’ll need your 10-digit reference number, found on any tax statement, plus your national insurance number.

Once you’ve registered, the ID and PIN are then sent to you in the post and could take up a week to arrive – that’s why it’s important to register as soon as possible if you want to be sure of getting your tax return filed by the 31st January deadline.

When you get the code you need to log in and activate your account. You only have 28 days to do this before the code expires and you have to apply for another one.

Even if you’ve used the online system before it’s best to get your return completed as soon as possible as HMRC’s website always gets busy close to the deadline.

What you need

To make sure you fill in the form correctly it’s important to have all the information you need to hand. This will include details of all income earned in the tax year April 2012-13 including self-employed earnings, income from investments and savings, rental income and capital gains.

You’ll also need your P60 and P11D documents, any interest statements from your bank or building society, and information on dividends from shares as well as details of your deductions including Gift Aid and pension contributions.

If you’re self-employed and work from home you can claim towards heating, lighting and cleaning as well as other expenses necessary to run your business. Keep receipts for anything you are claiming.

Alternatively, you may authorise an accountant to deal with your affairs on your behalf. By authorising an accountant, they will be able to file your tax return online if they are registered as a tax agent with HMRC. If you want to use this option, you should contact an accountant sooner rather than later.

Enjoy tax-free returns from the stock market

This is a classic lovemoney.com article that has been updated.

More on tax:

Pay less tax on your earnings

How to get a tax refund

What is payment on account?

How to make sure you’re on the right tax code

Enjoyed this? Show it some love

Twitter
General

Comments (2)

  • JsLooe1951
    Love rating 7
    JsLooe1951 said

    Using an accountant is fine - but it is also a fine if your accountant files your return late. In fact the scale of fines remains exactly the same even though it is not your fault. I ditched my accountant some years ago for exactly that reason. Fortunately though at that time the fines were refundable if no income tax was owed so both my wife and I got our money back. Since then I have always done my own return . . . . . ON TIME.

    Report on 04 January 2014  |  Love thisLove  0 loves
  • amwell44
    Love rating 77
    amwell44 said

    The fines are outrageous, when you think about it. Tax is only legalised theft of your money, after all and revenue is too often wasted.

    I agree it is best for your health not to cross HMRC however. They can and will, make your life a misery, or bankrupt you at the drop of a hat.

    Report on 12 January 2014  |  Love thisLove  0 loves

Post a comment

Sign in or register to post a reply.

Our top deals

Credit card
company
Balance transfers rate and period Representative
APR
Apply
now

Barclaycard 31Mth Platinum Visa

0% for 31 months (2.99% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.99% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

Barclaycard 30Mth Platinum Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.89% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

MBNA 30Mth Platinum Credit Card Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status.
W3C  Thank you for using Lock, Stock and Two Smoking Barrels