Self-assessment: don’t miss the deadline for online tax returns

The deadline for online self-assessment tax returns is approaching.

More than 12 million people are due to file a self-assessment tax return for the 2022/23 tax year, according to HM Revenue & Customs (HMRC). It’s not just the self-employed either, those who rent out property or get an income from savings or investments are also required to submit a form and pay any outstanding tax.

According to the taxman, around 6.5 million have already filed their returns, with around 50,000 opting to do so on either New Year’s Eve or New Year’s Day. 

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If you are one of those who will need to file a tax return, then the clock is ticking ‒ you only have a couple of weeks left.

So what do you need to know about submitting your self assessment tax return on time, and how can you avoid overpaying?

When do I need to file my self-assessment tax return?

There are different deadlines in place for filing your self-assessment tax return, based on how you do it.

If you submit a paper tax return, then the documentation needs to be with the taxman by midnight on 31 October. That’s no longer an option for taxpayers who need to submit their return for 2022/23 and avoid late fees.

There is a later deadline for those submitting their return online. If you make use of the online submission, you must do so by midnight on 31 January.

This January deadline is not only when you need to file your return, but also when you need to pay any outstanding tax. In addition, you will need to make the first ‘payment on account’ towards your tax bill for the 2023/24 tax year.

What happens if I miss the tax return deadline?

Penalties will apply if you file your self-assessment tax return after the deadline.

First and foremost there is a £100 fine for filing the return late, even if only by one day.

If you submit the return three months late then there will be a penalty of £10 per day, up to a maximum of £900. For a return sent six months after the deadline, there may be a further penalty of 5% of the tax owed or £300, whichever is greater, and for 12 months you may have to pay up to 100% of the tax owed as an additional penalty.

These are the penalties just for filing the return late, as there are further penalties that apply for paying your tax bill after the deadline too.

If you pay your bill 30 days later you’ll have to pay a penalty of 5% of the tax you owe, while if you are six months late you’ll be charged a further 5% of the tax owed at that date. If you’re 12 months late then there will be a further penalty of 5% of the tax owed at that date.

What if I make a mistake with my tax return?

If you make a mistake with your tax return, you can correct it even after the deadline. Tax return mistakes can be corrected within 12 months of the tax return being filed, with a new tax bill due on the updated return.

You will need to wait at least 72 hours after filing your return to make any changes.

How do payments on account work?

Payments on account are advance payments you make towards your next tax bill, ahead of the 31 January deadline.

There are two payments on account due, each of which is around half of the previous year’s tax bill. Once you file your tax return, you can then determine whether a top up payment is needed in order to clear the amount owed, or whether you can claim a refund.

The first payment on account must be paid by 31 January, while the second must be paid by 31 January.

So for example, if your tax bill for 2022/23 was £20,000, you will be required to make two payments of account, worth £10,000 each, for the 2023/24 tax year, with those payments required by 31 January and 31 July. 

If you believe your tax bill is likely to be lower than the previous tax year, then you can apply to have your payments on account reduced. 

How to hit the deadline on time and avoid overpaying

There are certain things to bear in mind if you want to remove the stress involved with filing a self assessment tax return correctly and on time.

First and foremost it’s a really good idea to give yourself as much time as possible. Registering to file a tax return can take a while, since you’re relying on the postal service to send you a Unique Taxpayer Reference (UTR) number. The earlier you start this process, the better.

Similarly it’s crucial that you take the time to gather together all of the relevant paperwork before you start attempting to fill in the return. That means bringing together your various pay slips, details of other income sources, savings and investments, pension contributions and even charitable donations.

Understanding the tax allowances and tax reliefs that apply to you is a good idea too, since you may be able to reduce the actual tax you have to pay once your submission is finished. BestInvest points out this can include the likes of the working from home allowance, the uniform allowance and the trading allowance of up to £1,000 for casual income. 

Once you have got that information together, it’s important to double check the calculations and make sure everything is accurate before you submit. Even if you make errors in good faith, you can be charged penalties by HMRC.

When the submission is finished, it’s useful to take lessons from it to work out how to reduce your tax bill in future years. In particular, topping up your pension can help you reduce your tax liability, as well as help provide for your retirement. You should also keep an eye on any changes to your tax code and check that it remains accurate for your circumstances.