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With self-employment in the UK now at record levels, it is expected that more people than ever will be required to file a SA return this year.
Professional tax body, the Chartered Institute of Taxation (CIOT) points out that this is the first year that taxpayers can submit their tax return using their Personal Tax Account. And with the introduction of the Government’s Making Tax Digital programme from April 2018, this year will also be one of the last times that the SA return will have to be submitted in its current format.
As in previous years, the SA return can also be filed using a HMRC Online Account which can take up to ten days to set up.
Self-employed
John Cullinane, CIOT’s Tax Policy Director, said: “Greater numbers of people in self-employment is a growing feature of the UK’s economy and unfortunately, one of the first things they need to think about in 2017 is tax.
"We urge self-employed people not to begin their new relationship with HMRC with a £100 fine by taking advantage of the tax authority’s online offerings, such as accessing their new Personal Tax Account to submit their SA return and follow the guidance on Gov.uk.
“Anyone who is self-employed is required to file a SA return, whether they are a sole trader or in partnership. This includes people who work in the ‘Gig Economy’ or have a second income from trading on EBay and similar websites. Likewise, anyone receiving income from renting out property through sites like Airbnb may also need to file a tax return.
"The Government has recently announced the introduction of a £1,000 tax free allowance for both trading and property income but taxpayers should note that these do not apply until April 2017, so will not affect the 2015/16 tax return.”
Registering
The first step is to register for SA which can take up to ten working days because it involves HMRC sending out a Unique Taxpayer Reference (UTR) number which they will need before they can enrol for the SA online service. The online account can take up to 10 working days to complete as it involves HMRC sending out an activation code in the post.
John Cullinane said: “Our message to taxpayers is not to leave things to the last minute. If they think they might miss the deadline and have a genuine excuse, they should contact HMRC as soon as possible before January 31 to discuss their case so they can potentially avoid a penalty after this date.
“For the first time, taxpayers can this year complete and file their SA return via their Personal Tax Account. The Personal Tax Account can be accessed using GOV.UK Verify which takes about ten minutes to set up with the right information, but we know that many taxpayers have found this process difficult. The alternative is to set up a Government Gateway account which can take up to ten working days, although if you have used HMRC’s online services before you will already have one."
Reasonsonable excuse
Taxpayers should note that if they miss the January deadline they will be fined £100, regardless of whether they actually owe any tax. If the return is still outstanding after three months a charge of £10 per day for the next 90 days will be applied. No penalty is due if the taxpayer has a ‘reasonable excuse’ for filing their tax return late. Any tax due must also be paid by 31 January to avoid interest charges and penalties.
However, some (unsuccessful) excuses considered less than reasonable, as HMRC revealed some of the more creative excuses they had received.
Each year HMRC receives a number of unusual excuses from Self Assessment customers who didn’t complete their tax return on time.
Picture of a burning boat
These include:
“My tax return was on my yacht…which caught fire”
“A wasp in my car caused me to have an accident and my tax return, which was inside, was destroyed”
“My wife helps me with my tax return, but she had a headache for ten days”
“My dog ate my tax return…and all of the reminders”
“I couldn’t complete my tax return, because my husband left me and took our accountant with him. I am currently trying to find a new accountant”
“My child scribbled all over the tax return, so I wasn’t able to send it back”
“I work for myself, but a colleague borrowed my tax return to photocopy it and lost it”
“My husband told me the deadline was the 31 March”
“My internet connection failed”
“The postman doesn’t deliver to my house”
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Susie Hughes © Shout99 2017
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