With self assessment it is up to you to notify HMRC of how much tax you owe by completing a self assessment tax return with details of your income and gains.
You must notify HMRC by 5th October following the end of the tax year in which the income first arose unless you have already been sent a tax return to complete.
If you have untaxed income of less than £2,500 and you are in employment, HMRC will collect the tax through the PAYE scheme. But you must write and tell HMRC of the amount of income you have received.
If the income exceeds £2,500 HMRC will send you a self assessment tax return.
The deadline date for filing a paper return is 31st October after the end of the tax year.
The deadline date for filing a return online remains at 31st January after the end of the tax year.
You will be charged interest on overdue tax from the date the payment was due.
If your payment is more than 28 days late you will be charged an additional surcharge of 5% of the outstanding amount. A further 5% will be charged if the payment still remains outstanding by 31st July. The surcharge is in addition to the interest charged on a daily rate.
A £100 penalty is charged if the return is not submitted by the filing date.
An additional penalty of up to £60 per day can be applied for by HMRC if the return continues to be outstanding.
If the return is still outstanding some 6 months after the deadline date and HMRC have not yet applied for the daily penalty an additional £100 penalty will be imposed.
A further penalty of an amount not exceeding the tax that would have been payable under the return, will be imposed if the return is not submitted by the anniversary of the filing date.
The fixed penalties cannot exceed the amount of tax due for the year and will not apply if a refund of tax is due. Any penalties paid in these circumstances will be refunded by HMRC. Daily penalties, however, are not limited to the tax payable and these will not be reduced.
If more than one tax return is outstanding, penalties will apply to each return.
Records of all information used to complete tax returns must be kept for 22 months after the end of the tax year, or for 5 years and 10 months for those carrying on a business or who have income from letting out property.
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