Who needs to file a return?
You'll normally need to file if you're self-employed, a partner in a partnership, a landlord, or you have untaxed income such as significant savings, investment or foreign income. Many company directors also file one.
Payments on account
If your last tax bill was over £1,000 and less than 80% of your tax was collected at source, HMRC asks for advance payments towards next year's bill. These are due on 31 January and 31 July. Each is half of the previous year's liability.
This catches out a lot of people in their first year of trading, because the January bill can include the balance for last year plus the first payment on account for this year.
Late filing penalties
HMRC's penalties for a late return build up over time:
- £100 as soon as the return is late
- £10 a day after three months, for up to 90 days (up to £900)
- The greater of 5% of the tax due or £300 after six months, and again after 12 months
- Interest and separate late-payment penalties on unpaid tax
How to stay ahead
The simplest fix is to file early. Once your return is in, you know your bill months before it's due and can plan for it. We aim to finish clients' returns well before Christmas.