It is a fundamental part of the self assessment system that responsibility lies with you, the taxpayer, to file Returns and pay the right amount of tax, at the right time - you must not wait for HM Revenue & Customs (HMRC) to ask.
Tax Returns
Tax returns covering income for the year ending 5 April 2016 will be issued on or after 6 April 2016, and will consist of a main tax form and supplementary pages. Your tax office will send out what they think are the relevant supplementary pages. If you need other supplementary pages you will have to ask for them. The completed full return has to be submitted to HMRC by the ‘filing date’, which is 31 October 2016 for paper returns, and 31 January 2017 for online returns.
You should note that your return must be completed as far as the total income on which tax has to be paid. Figures must be given for every item, even if only estimates. It is not possible to enter question marks or leave the tax inspector to decide whether an item is taxable or not. The only section that can be left for the tax office to complete is the actual calculation of the tax due on your total income.
If you have taxable income or capital gains for 2015-16 and have not received a tax return, you must advise your tax office by 5 October 2016 at the latest.
There are automatic penalties for late filing of tax returns, as follows:
- Day one - Individuals will be charged an initial penalty of £100, even if they have no tax to pay or have already paid all the tax owed
- Over three months late - Individuals will be charged an automatic daily penalty of £10 per day, up to a maximum of £900
- Over six months late - Individuals will be charged further penalties, which are the greater of 5% of the tax due or £300
- Over 12 months late - Individuals will be charged yet more penalties, which are the greater of 5% of the tax due or £300. In serious cases people face a higher penalty of up to 100% of the tax due.
HMRC has made it known that it will cancel any outstanding returns and associated penalties where taxpayers call them and explain why they do not need to be in the self assessment system.
Amendments, Inquiries and Record Keeping
You have one year from the filing date to make any amendments to the return. HMRC may correct obvious errors or mistakes within nine months of receipt of the return.
Within a period of one year from the date the tax return is submitted, HMRC have a right to make enquiries to check that the tax return has been correctly completed. No reason for the enquiry need be given.
All records relating to the return should be kept during this one-year period. If trading or rental income is involved, all records should be kept for a further four years.
Determinations
If a return is not submitted by the due date, HMRC can, within five years of the filing date, make an estimate to the best of its information and belief of the amount of tax due. This amount of tax will be payable without appeal, but will automatically be superseded when the return and self assessment are sent in.
Payment of tax
Payments on account of income tax (and Class 2 and Class 4 national insurance contributions) for a particular tax year will be due on 31 January in the tax year and 31 July following the end of the tax year. These payments will be based on one half of the total income tax liability (less any tax deducted at source) for the previous tax year.
You have the right to reduce payments on account if you believe the income tax for the current year will be lower than that for the previous year. However, you may be charged interest if the reduction is more than it should be.