If you’re a business owner you will presumably already know that you have to pay income tax (based on the drawings you’ve taken from the business) as well as tax on company profits (corporation tax). Income tax is paid via self-assessment and the deadline is looming!
The last day you can submit your details and pay tax owed is 31 January 2015 for the tax year 2013-2014, and it has to be done online. If you’ve submitted a return online before it’s a relatively straightforward process to log in, fill in the forms and click “submit”. Remembering your login details from last time is probably the hardest bit.
Even if you’ve only recently become self-employed (sole trader, partnership or limited company) you may already have filled in self-assessment if you’ve made income from property, or from a second job or part-time business, or by receiving money or property via an estate or trust. If so, you can use the same login to declare your income from self-employment.
If you haven’t registered for online self-assessment, you need to get a move on since you will have to wait for HMRC to send you login details and an “activation code” by post. Go here to start the process: https://www.gov.uk/register-for-self-assessment
Similarly if you can’t remember your username and password for the system you should start the process to reset them asap since HMRC may insist on sending new details by post, which could take a couple of weeks.
Don’t forget penalties are imposed for not filing returns and paying the tax due by 31 Jan 2015. These are:
1 day late - £100 fine
3 months late – the £100 above plus £10 for each further day that you are late, ie: up to a potential £900 in fines
6 months late – all of the penalties above, plus £300 or 5% of tax due (whichever is higher)
12 months late – all penalties above, plus £300 or 5% of tax due
As well as using HMRC’s free online service a number of accounts packages (eg: Sage, TaxCalc) allow you to submit your self-assessment from within their software, with the correct (hopefully) amounts already calculated from the information you’ve added during the year. You’ll still need to go through the registration process with HMRC the first time though.
The best way to deal with self-assessment though is to leave it to a professional bookkeeper like The Financial Management Centre in Farnborough. As well as making sure all the numbers are right and you pay on time, they will also make sure you’re not overpaying by missing out on the tax reliefs and allowances you can legitimately claim.
Whichever way you choose to do your self-assessment, make sure it’s done by the end of 31 Jan 2015 to avoid those painful and unnecessary fines!