The Self Assessment tax deadline on 31 January 2025 is a critical date for individuals and businesses in the UK who need to report income and calculate any tax due for the 2023-24 tax year. Missing this deadline can result in fines and interest on any overdue tax, so it’s essential to be prepared. Here’s everything you need to know:
1. Who Needs to File a Self Assessment Tax Return?
- Self-Employed Individuals: If you’re self-employed or a sole trader, you must report your income through Self Assessment.
- Company Directors: Directors who receive income not taxed at source typically need to file.
- Landlords and Property Owners: If you earn rental income, it generally must be reported through Self Assessment.
- High-Income Earners: Those earning over £100,000, or earning over £50,000 and claiming Child Benefit, are usually required to file.
- Income from Dividends or Savings: If you have income from dividends, investments, or savings that exceeds personal tax-free allowances, you’ll need to declare it
2. Key Dates for Self Assessment Deadline (2023-24 Tax Year)
- 6 April 2024: Start of the tax year 2023-24.
- 5 October 2024: Deadline to register for Self Assessment if you’re self-employed or have other income that requires you to file.
- 31 October 2024: Deadline for paper tax returns.
- 31 January 2025: Deadline for online tax returns and payment of any tax due for the 2023-24 tax year.
3. Registering for Self Assessment
- If you haven’t filed a Self Assessment before, you must register with HMRC. You’ll need to do this by 5 October 2024 for the 2023-24 tax year. This gives HMRC time to set up your account and issue a Unique Taxpayer Reference (UTR).
- Online Registration: Most people register online, but you may also register by phone or post if necessary
4. Filing Your Tax Return
- Online Submission: Filing online via the HMRC website is the most common method, especially as the deadline for paper returns is earlier (31 October 2024).
- Information Needed: You’ll need information on all income sources, allowable expenses, tax reliefs, and deductions. Gather any P60s, P45s, dividend statements, rental income records, and business expense receipts in advance.
- Digital Accounts: HMRC’s online service allows you to save your progress and return to the form at any time, making it easier to complete at your own pace.
5. Payment Due Date
- Alongside submitting your tax return, you must pay any tax owed for the 2023-24 tax year by 31 January 2025. This includes:
- Balancing Payment: The remaining tax owed for the 2023-24 tax year.
- First Payment on Account: An advance payment for the 2024-25 tax year if your tax bill exceeds £1,000.
- Late Payment Penalties: If you miss the deadline, HMRC charges an initial £100 penalty, followed by additional fines based on the duration of the delay, and daily interest on the amount owed
6. Penalties for Missing the Self Assessment Tax Deadline
- Initial Penalty: £100 if filed up to 3 months late.
- Additional Penalties: £10 per day (up to 90 days) if over 3 months late, plus further penalties for longer delays.
- Late Payment Interest: Interest accrues daily on unpaid taxes from 1 February 2025. If you expect a delay in paying, consider contacting HMRC in advance to arrange a Time to Pay agreement
7. Deductions and Allowances to Remember
- Allowable Expenses: If you’re self-employed, you can deduct certain business expenses to reduce your taxable income. Common deductions include travel costs, office supplies, and marketing expenses.
- Personal Allowance: This is the income you can earn before paying tax (£12,570 for most taxpayers in 2023-24).
- Dividend and Savings Allowances: If you earn dividends or savings interest, specific tax-free allowances apply, and they should be factored into your tax calculation
8. Using a Tax Professional
- Many people find it beneficial to use an accountant, especially if they have multiple income sources or complex financial arrangements. Accountants can help ensure accuracy and may identify additional deductions or allowances.
9. Double-Check Before Submitting
- Make sure all information is correct, especially regarding income and expenses. Mistakes can lead to additional queries from HMRC and, in some cases, penalties.
10. Save Your Submission Confirmation
- After filing, save the confirmation page or email from HMRC. This proof of submission is essential if any issues arise later.
Preparing ahead of time and double-checking all information before submission will help avoid last-minute stress and potential penalties. Being proactive can ensure you meet the 31 January 2025 deadline and avoid any unnecessary fees.