Self-Assessment is based on the assumption that you are responsible for completing a
tax return and paying any tax owing each year, if necessary. It is your responsibility to contact HM Revenue & Customs (HMRC) if you feel you need to file a tax return… This method is known as self-assessment.
So, how am I expected to determine if it’s necessary?
First and foremost, whether HMRC has permitted you to do so, the onus, however, is on the individual. If you fall into one of the following categories, you must first register for a Unique Taxpayer Reference Number (UTRN) with HMRC online (UTR).
This warning to HMRC should have been sent out no later than October 5.
HMRC should have received notification of a person’s tax due by October 5 2021, for the 2020/21 tax year (which ended on April 5 2021). By January 31 2022, all unpaid tax payable to HMRC must be paid.
*However, COVID has caused some of these timings to change at this time.
Do I fit into one of the following categories?
Individuals are self-employed and run their own business with annual revenue of more than £100,000, including locum physicians.
A high-income earner is someone who claims more than £2,500 in expenses in a single year.
Limited-liability corporation (LLC) directors.
The vast majority of landlords have rental properties of their own.
Individuals who earn money through dividends or other investments.
Partners in a partnership or limited liability partnership (LLP) collaborate.
The higher-earning partner has claimed child benefits for themselves or their partner and has an annual salary of more than £50,000.
People who earn money in ways that aren’t taxed.
People who sell real estate, stocks, or other assets to raise chargeable money.
Individuals who do not live in the United Kingdom yet earn or benefit from the country.
Individuals looking for higher or extra-rate tax relief on private pension contributions or charity donations, as well as help with venture capital plans.
Non-UK domiciled individuals wish to claim the remittance basis of taxation or UK nationals having foreign sources of income or gains subject to UK tax.
What happens if I don’t file my tax return by the deadline?
Tax returns filed after the deadline (31/12/22 for 2020/21), but within three months of it, will be subject to an automatic £100 late filing penalty.
A daily penalty of £10 per day for up to 90 days (a total of £900 in daily fines) can be applied if the tax return is filed more than three months late. If tax returns are not filed within six months after the due date, a penalty of 5% of the tax payable or £300 (whichever is greater) is levied, and HMRC has the authority to request an assessment of the tax due.
If you miss a filing or payment date, the penalty might be severe unless you persuade HMRC that you have a valid reason.
As a result, it’s vital to start planning ahead of time so you can assemble all of your tax information and deliver it to your specialised medical accountant, if you have one, as soon as possible after April 5 each year.