Tax deadline warning
Thousands of new freelancers are running out of time to register for self assessment, HM Revenue & Customs has warned, potentially leaving them vulnerable to fines and interest charges.
The self assessment tax system requires self-employed taxpayers to file a return for the tax year that ends in April by the end of the following January. However, paper-based returns must be filed at least three months earlier, by 31 October – since that deadline has already passed, anyone who has yet to file their 2011-12 tax return will now have to do so online.
To do so, however, taxpayers must be registered with HMRC’s online service, a process that can take seven working days – or even longer in certain circumstances. So those who leave filing online until the last minute may find they can’t get on to the system in time to meet the 31 January deadline.
There is an automatic £100 fine for those who miss that deadline and the penalties escalate rapidly for those who continue to fail to get their return in thereafter.
The rapid growth in the number of freelancers over the past five years – with numbers up by 300,000 – has seen more and more people move within the reach of self assessment. Some tax advisers are now concerned many of those freelancers may not yet have got to grips with the tax rules.
It’s easy to register – just visit www.hmrc.gov.uk/signup and follow the instructions. You’ll immediately get a User ID and, once you’ve received the Activation Code in the post, you can activate your account. You can then complete your tax return online.
For help and advice on completing a return, visit www.hmrc.gov.uk/sa or call the Self Assessment helpline on 0845 9000 444.
By David Prosser, Editor of Freelancing Matters magazine