Self assessment tax returns for individuals and companies

If you do not submit a Self Assessment Tax Return on time, you may have to pay a penalty. The Self Assessment Tax Return is a form which includes various schedules and can appear rather daunting. However, only the schedules that apply to your circumstances need to be completed.

The Self Assessment Tax Return must be submitted by the 31st January for the financial year that ended on the 5th April, in the previous year. The Inland Revenue can work out your tax, if you wish, but you must submit the form before the 30th September in the same year as your financial year finished. Be aware that:

random checks are made on completed forms
late tax returns incur automatic fixed penalties
incorrect tax returns incur variable penaltie
interest and surcharges are charged for late payment of tax

Employees

PAYE is not affected by self assessment unless you need to complete a tax return. It’s your responsibility to tell the Inland Revenue about anything that may affect your tax position.

You should consider a complete review if you think you may be paying the wrong amount of tax. Many people are paying too much tax. Others are not paying enough which may cause problems in the future.

Employers

You must provide the Inland Revenue with the required information about your employees. Also, you must make sure that you keep adequate and appropriate records.

Self employed

You need to be able to justify the figures included in the business accounts section of the Self Assessment Tax Return. You could be fined £3,000 if your ‘accounts’ are deemed 'inadequate' .

Retired

The Inland Revenue will not necessarily check that the correct amount of tax is deducted from your pension. The Inland Revenue holds millions of pounds of unclaimed tax refunds – a lot of which belongs to retired people!

Subcontractors

Construction industry subcontractors may no longer be entitled to receive tax free payments.
The exemption certificate, CIS6, now needs to include evidence that your tax situation is correct and up to date.