The Low Incomes Tax Reform Group is reminding people that the online tax return filing deadline of 31 January 2019 is approaching fast. The advice is because HMRC found that almost half of 2016/17 tax returns were filed in the month of January.1
LITRG is reminding people there is guidance and help available for those struggling with their tax return. The LITRG website has comprehensive guidance on most areas of tax and HMRC have many sources of information including webinars, YouTube videos and webchat facilities, as well as its Self Assessment helpline (0300 200 3310 or textphone 0300 200 3319).
HMRC understand that about 2.3 million people who filed in the month of January 2018 were self-employed or in a partnership. LITRG points out that the introduction of the new trading allowance could benefit many self-employed on low incomes because it may simplify the entries on their tax return or it could mean that they no longer need to submit one.2 LITRG has produced a factsheet which explains the trading allowance in detail on its website.3
LITRG Chair Anne Fairpo said:
“There is still time to avoid a fine if you are one of the millions of people who still need to complete and submit a tax return for 2017/18. But you will need to file the tax return online. If you have not yet registered for online filing this process can take a few weeks so you will need to do this urgently. We published a helpful article ‘Filing your tax return for the first time? Be clear on the registration process’, on our website.4
“It may be the case that you have started your tax return but are stuck with the tax treatment of a particular expense. Or you are unsure if parts are correct or even if you still need to file a tax return. There is help available from organisations such as LITRG and also HMRC. It would be better to look for help now rather than miss the deadline and get charged an automatic late filing penalty of £100.”
LITRG is reminding taxpayers to double check that they have correctly submitted their return online when they have fully completed it. A taxpayer may complete their tax return and print off their draft return and tax calculation but unfortunately not realise that they also need to submit the return as the last step of the online process. If they have used HMRC’s online filing system correctly, then they should get a submission receipt from HMRC once the process is completed.
HMRC charge an automatic penalty of £100 for tax returns that miss the 31 January deadline. The penalties increase the longer the delay in the submission of the return.
Notes for editors
1. HMRC understand that 10.3 million full self assessment tax returns were submitted for the 2016/17 tax year; and 367, 000 short self-assessment tax returns were submitted for that tax year. Of this combined 10.6 million tax returns, 4.8 million were received in the month of January 2018. Of this, 2.3 million related to self-employment or business partnerships.
2. If HMRC send a tax return then normally it must be completed by the deadline. However, if the person believes they don’t need to submit a return due to the trading allowance rules or for any other reason, they should contact HMRC before the deadline and ask them to cancel the return.
3. LITRG’s trading allowance factsheet for the self-employed can be found here
4. Filing your tax return online for the first time? Be clear on the registration process, LITRG, December 2018
5. Self Assessment is a system HMRC uses to collect income tax. Tax is usually deducted automatically from wages, pensions and savings. People and businesses with other income must report it in a tax return. If someone is filing online for the first time, they must have received their Unique Taxpayer Reference (UTR), enrolled for the online service and activated their account using the code they receive.
You must send a tax return if, in the last tax year (6 April to 5 April), you were:
· self-employed as a ‘sole trader’ and earned more than £1,000
· a partner in a business partnership
You will not usually need to send a return if your only income is from your wages or pension. But you may need to send one if you have any other untaxed income, such as:
· money from renting out a property
· tips and commission
· income from savings, investments and dividends
· foreign income
6. Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk
Out of hours contact: George Crozier, 07740 477 374)