As HMRC’s Self-Assessment deadline of January 31 approaches, Advice NI is encouraging taxpayers not to delay in filing their return. Those who miss the deadline may face penalties, even if no tax is owed.
The penalties vary but can accumulate quickly. If a self-assessment if filed after the deadline an initial £100 fixed penalty applies, even if there is no tax to pay, or if the tax due is paid on time. After 3 months, additional daily penalties of £10 per day, up to a maximum of £900 apply. After 6 months, a further penalty of 5 per cent of the tax due or £300 charge, whichever is greater, will be due. And after 12 months, another 5 per cent or £300 charge, whichever is greater, is due. If tax remains unpaid after the deadline, interest will also be charged on the amount owed, in addition to the penalties above.
As a result, Sinead Campbell, Head of Money, Debt and Quality at Advice NI, explains that it’s always best to check with an expert if you’re unsure about whether or not you need to file.
She says, “There are various instances in which people may need to file, and it’s important to be clear on your responsibility to avoid having to pay any penalties. People may need to file a return if they are newly self-employed and have earned a gross income over £1,000 or are a new partner in a business.
“However, in addition to these instances, people may also need to file if they earned below £1,000 but wish to pay Class 2 National Insurance Contributions voluntarily to protect your entitlement to State Pension and certain benefits. Similarly, people who received Child Benefit payments but now need to pay the High-Income Child Benefit Charge because they or their partner earned more than £50,000 in the 2023/24 period will also need to register and complete the self-assessment.”
Sinead also points out that many individuals earn an income that HMRC doesn’t know about, and these earnings need to be reported to HMRC in a Self-Assessment.
She says, “Side hustles are on the rise across Northern Ireland. From selling clothing online to doing deliveries to offering beauty treatments from home, people here in Northern Ireland have an entrepreneurial spirit, and are finding ways to increase their income in these challenging times. However, as positive as this is, these earnings need to be reported to HMRC.
“Earnings of less than £1000 in one tax year are not considered taxable income so those who haven’t surpassed that threshold won’t need to register as self-employed or declare this income to HMRC.
“Anyone new to Self-Assessment will need to register before they can send their tax return. People should register on GOV.UK and should allow up to ten working days to receive their Unique Taxpayer Reference (UTR) which they can then access through HMRC Online Services or the HMRC app. Similarly, anyone who no longer needs to file a Self-Assessment return should inform HMRC now via HMRC Online Services.”
Sinead concludes, “Our experts are on-hand to help you navigate your Self-Assessment. If you think you might need to declare earnings or owe tax to HMRC, we strongly recommend reaching out for support. Alternatively, the HMRC Self-Assessment portal is a great resource and should help you understand your next steps before the deadline. If you miss the deadline, our advice would be to reach out to our advisors who can help determine best next steps.”
Advice NI and the Independent Advice Network consist of 64 members and more than 300 advisers across Northern Ireland all providing free, impartial and confidential advice to businesses and consumers. For more information visit adviceni.net or gov.uk/self-assessment-tax-returns.