Business Can Be Taxing
Christmas done. New Year done. Tax returns… damn! Here comes the deadline
You can’t just bury your head in the discarded wrapping paper, hangover cures, gym membership, or pretend that Boris has just got it done. The end of January is the deadline for you sending (online) HMRC your income and expenses from self-employment, and if you fail it will only cost you more. It is vitally important you remember to include everything that you have earned during the tax year when submitting your tax return. This means income from employment, self-employment, property, bank and other interest and gains on your investments to name just the common ones. Failing to declare accurately could spark HMRC to open an investigation into your affairs, which isn’t fun, and excuses down the line are not appreciated. At the same time, it is equally important to ensure you claim all your business-related costs in order to make sure you only pay the amount of tax you need to. We all know ‘every little helps’, so don’t miss out on those small items that are often missed, precisely because they are small, they all add up over the year and could make the vital difference between which tax level threshold you find yourself in.
You can actually submit your return anytime between the 6th April (first day of the new tax year) and 31st January, but you must not exceed this final date or it’s a £100 automatic fine, and further costs accruing as the days and weeks go on after the deadline. If you’ve left it late this year, and now the stress is building, why not make a note in your new diary to complete your return as soon as possible after the end of the tax year next time, when you still have a clearer memory of the year just gone, where your receipts and invoices are, what they are for, especially for any items you don’t regularly need to include. We’d never advise leaving your Return to the last minute, if for no other reason than the sooner you do it, the more time you have to find the money to pay any tax due, especially if it turns out you owe more than you thought.
Last year around 750,000 self-employed individuals missed the filing deadline and instantly received a £100 fine. From those that missed the filing deadline there were some, let’s say creative, reasons reported to HMRC, which included;
● My mother-in-law is a
witch and put a curse on me
● I’m too short to reach the post box
● I was just too busy – my first maid left, my second maid stole from me, and my third maid was very slow to learn
● My boiler broke and my fingers were too cold to type
The late filing penalties are:
● 1 day late: £100 penalty
● Up to 3 months late: £10 each day (capped at 90 days) plus the initial £100
● 6 months late: Either £300 or 5% of the tax due (whichever is higher) plus the above.
● 12 months late: Additional £300 or 5% of the tax due plus the above
If you do think you will miss the filing deadline, make sure you speak to HMRC or your accountant. Genuine reasons for late filing will be taken into consideration. On that note, read more about FBTC’s Take 20 campaign.
Sometimes just saying ‘How can I help you?’ can make a massive difference to someone’s day, week, maybe month and although it is only five small words, they can have a big impact. This is a potentially stressful time for all the self-employed driving instructors, so to celebrate starting a regular series of ‘Business Matters’ articles for Intelligent Instructor and to wish you all a Happy New Year, we at FBTC are offering 20 mins FREE accountancy and tax support (we can only offer general advice and guidance, for example running through the expenses you can claim, because we aren’t instructed to act as your accountant. We will not be able to view any of your information, but the general advice could provide you with the reassurance needed). So, just get in contact through fbtc.co.uk if you need some help, quoting ‘Intel20’, and we’ll call you back.
For now, the deadline dates for your tax affairs are the same. Making Tax Digital may change this, but until the government make announcements on this, here are some 2020 key dates:
31st January 2020 – Online deadline for your 2018/2019 tax return and paying previous tax bill
6th April 2020 – New Tax Year begins
31st July 2020 – Payments on Account
31st October 2020 – Filing deadline for paper tax returns for 2019/2020 (6th April 2019 to 5th April 2020).
If you need help with your tax return visit the FBTC website