All that you need to know about UK Self Assessment Tax Return

Most of the tax-payers based out of UK have their tax collected through Pay as You Earn Scheme. Although this is the most effortless and effortless way of tax collecting not all tax-payers comes under its stretch. PAYE schemes are effective only for those tax-payers with full-time employment and recover their taxes through their employment. These schemes cannot recover tax from people who earn from different sources and this is where Self Assessment Tax Return comes into play. If you live in UK and are supposed to file a self assessment tax return every year this blog can help you learn and understand the implications of this tax in a lucid manner.

Foremost, you need to be registered at HMRC before you can send out your for self-assessment tax return. During your maiden registration you will receive a Unique Taxpayer Reference number or UTR. Usually in the month of April or May you will receive a letter from HMRC to send out your tax return. There is a deadline for sending return and you could be penalised if you miss it. The tax year for 2013 to 2014 ends on 5^th April and the deadline for filing your paper tax return is midnight 31^th October, 2014. If you miss it you can still have it done online on or before 31^st January 2015 which is also the last date for final payment of any due tax.

Now that you are aware of the deadlines and have already started taking measures to avoid legal prosecution, wait awhile and ensure whether you actually fall in that category that must send self assessment tax return. If you are the director of a company or a partner in a business partnership you do fall in that group. In case you are a self employed or sole trader you also have to pay this tax within deadline to avoid penalty. You have to pay £100 for 1 day late for up to 3 months and the amount keeps increasing the longer you delay.

You can only avoid penalties, fines and interests if you can produce a reasonable excuse. According to The HMRC it can be serious troubles at home of work. Serious troubles at home can be any illness causing people hospitalized or family bereavement and by trouble at work HMRC can accept IT issue, breakdown of computer while preparing a return online. But lame excuses like ‘forgetting the deadline’ ‘finding online system too hard’ and ‘blind dependence on accountant’ will not save you from paying penalties.

Even though you can arrange all data and submit the tax return online through the portal of HMRC but it is always better to outsource the work to an accountant who is adept in handling self assessment tax returns.