Benedict Smith, public relations manager at Albert, explains the self-assessment tax return deadline for self-employed freelancers, contractors and entrepreneurs.
At the best of times, January is hectic for startups. Armed with new, grand and ambitious plans to innovate, reshape and disrupt industries, there’s a lot going on. This is why for many of the freelancers, contractors and entrepreneurs playing starring roles in the 600,000 or so UK startups, the fact that your self-assessment tax returns lie just a few days away is a bit of an inconvenience.
January 31st is a mixed bag of emotions for freelancers. You’ve just about made it through the first, grueling month of the year, but there still lies something in your way – the submitting of your self-assessment tax returns.
That is, unless, you happen to be one of those organised types – that commendable self-employed person who’s calculated and submitted their accounts to HMRC already, and so avoids the last-minute panic dash, not to mention the £100 penalty for filing late.
But if you’re running late, you probably aren’t alone. In 2015, some 960,000 freelancers and self-employed people in the UK missed the midnight deadline on 31st January. For many of us, failing to submit our tax returns on time has become somewhat of a joke.
From “my tax return was on my yacht, which caught fire”, to “my wife helps me with my tax return, but she had a headache for ten days”, HMRC has heard every excuse in the book, as HMRC’s Ruth Owen explained.
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“Blaming the postman, arguing with family members and pesky insects – it’s easy to see that some excuses for not completing a tax return on time can be more questionable than others. Luckily, it’s only a small minority who chance their arm.
The penalties for missing the deadline start with an initial £100 fine, with £10 lumped on top daily, until you hit an eye-watering £900. As you can imagine, after 6 months, the fine simply increases in stages.
So stating the obvious, it pays to submit your returns on time. That said, in some cases you will be excused. So here’s when you’re legally allowed to miss the incoming self-assessment deadline:
Illness or injury
Unexpected stay in hospital? HMRC will overlook the fine. Presumably a doctor’s note is required though…
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Strikes or postal problems that stop your returns reaching HMRC in time.
Death of a relative
If your other half dies or another close relative passes away.
Every techies’ worst nightmare. If technology problems stop you from submitting your returns, or causes you to lose them, you’ll be given a little leeway.
If HMRC’s website crashes or a system problem prevents you from submitting your accounts, you are excused. It might just be your saving grace…
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Whether it’s fire, theft or flooding, there are some things you simply can’t control.
“There will always be help and support available for those who have a genuine excuse for not submitting their return on time. If you think you might miss the 31 January deadline, get in touch with us now – the earlier we’re contacted, the better,” said HMRC’s Ruth Owen.
So now you know. And believe it or not, HMRC is understanding, just as long as you have a legitimate excuse for missing the deadline. If you’re simply running late or just a little forgetful though, it might just be time to get a better handle on your finances.