19 December 2017

Get prepared for self-assessment tax return now to beat HMRC fines urges Royal London

3 min read

Helen Morrissey, Personal Finance Specialist
Helen Morrissey

Corporate PR Specialist – Long Term Savings


Royal London has urged those who need to file a self-assessment tax return online to get prepared now to reduce the risk of being hit with a late submission fine1 in the new-year.

Around 11 million people are expected to file their self-assessment tax return for the 2016/17 tax year by 31 January 2018. This covers the period between 6 April 2016 and 5 April 2017. However, every year many miss the deadline - 840,000 people last year alone – leaving them at risk of incurring fines from HMRC.

While in some cases late submission might be unavoidable due to illness or bereavement, in many cases people face last minute delays signing up for the service or getting the right paperwork together.

You will need to fill out a self-assessment tax return if you are self-employed, if your taxable income was more than £100,000 or if your income (or your partner’s) was over £50,000 and one of you claimed child benefit. You will also need to fill out a return if you are a trustee of a registered pension scheme or if you had income from savings or investments of more than £10,000 before tax. (For a full list of who should fill out self-assessment see notes to editors2.)

While HMRC is starting to treat accidental errors more leniently it will still levy fines where non-compliance is deemed to be deliberate. It is currently consulting on plans to replace the current system with a points based system that looks at a taxpayer’s recent filing history before imposing a penalty. However, this will not affect those filing for the January 2018 deadline.

Key things to bear in mind include:

  • You still have to fill in the self-assessment form even if you don’t owe any tax – If you get an email or letter from HMRC telling you to send a return, you should send it - even if you don’t have any tax to pay.
  • It takes time to enrol – Many first timers fall foul of leaving themselves with too little time to get set up on the system. If you submit your tax return online you will need to do it via the Government Gateway service (https://www.gov.uk/log-in-file-self-assessment-tax-return). To do this you will have to enrol for the service with HMRC and receive your Unique Tax Reference (UTR). Activating your account takes time and it can take up to ten working days to receive your UTR. Many people don’t realise this and try and set up their account at the last minute and so miss the deadline.
  • Get your paperwork ready – If you are self-employed you will need any invoices and receipts for work you carried out during this time as well as bank statements and bank interest certificates. If you are claiming due to Child Benefit issues then copies of you or your partner’s P60s will give you important information needed to fill out the form. Paperwork for any investments will also prove useful.
  • IT issues – Leaving filling out your tax return to the last minute leaves you open to being derailed by a whole host of IT issues. The self-assessment website gets very busy in the days leading up to the deadline and as recently as early December the system crashed. While the problem was rectified you don’t want to find yourself in a similar situation come January 31st.
  • Check your return – Before you hit the submit button have a final scan through the form and double check that the information you have submitted is correct and up to date. It’s also worth printing out a copy of the return and keeping it somewhere safe in case HMRC come back to you with any queries.
  • Think about how you are going to pay – From January 13 2018 HMRC will no longer allow people to pay their self-assessment tax return by personal credit card. It also limits how many times you can use a card to settle the tax bill. If you are unable to pay your self-assessment tax bill in full using one card then it may be worth looking at using another method such as bank transfer.

Helen Morrissey, personal finance specialist at Royal London said:

There are occasions when filing your tax return late is unavoidable in which case let HMRC know as soon as possible as they can waive fines if you have a reasonable excuse. However, HMRC is unlikely to be sympathetic if you tell them you didn’t give yourself enough time to fill out the forms and so you could find yourself with a £100 fine for starters. Delays often happen because people don’t realise how long things such as tax references can take to come through or it can take time to collect the necessary paperwork. Getting organised now can save you a lot of stress as well as money further down the line.

If you need to appeal against a late payment fine you can do so here.

- ENDS -

For further information please contact:

Helen Morrissey, Corporate PR Specialist – Long Term Savings

Notes to editor:

  1. You will get a £100 fine if you submit a self-assessment tax return late.
    1. If it is three months late you will receive a fine of £10 for each following day up to a 90 day maximum of £900.
    2. Six months late - A fine of either £300 or 5% of the tax due, whichever is the higher, will apply on top of the penalties above.
    3. 12 months late - Another £300 fine or 5% of the tax due, whichever is the higher will be added to your bill on top of the penalties above. In serious cases you may be asked to pay up to 100% of the tax due instead, as well as any tax you owe. This would double the amount you have to pay.
  2. https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

About Royal London:

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.