Self Assessment

“Self Assessment” is essentially a DIY tax system which is usually fulfilled by accountants. We calculate the tax position of our clients and efile their Self Assessment on the Revenue computer. The Revenue role is primarily to check that the correct tax has been reported to them and collected.

Who needs to file a Self Assessment? Not everyone has to file a tax assessment but it will be required if either:

  1. The Revenue have asked you to file a Self Assessment, or
  2. You have underpaid tax in the last fiscal year ended on 5th April

Normally, the Revenue will ask every Company Director and self employed person to file a Self Assessment, as well as other individuals who have reported tax owing in the past. For example, this could apply if you own a buy to let property. If you commence a trading activity you should notify the Revenue within 3 months of starting. Otherwise, if you have not been asked for a Self Assessment but are aware that you owe tax for a particular year then you should notify the Revenue by 5th October following the end of the fiscal year on 5th April.

Time Limits and Penalties

We recommend that you should aim to complete your Self Assessment as early as possible in the tax year. This will give you the most time to plan for tax payments falling due over the next 12 months and to consider any potential for saving tax.

If you complete a Self Assessment on a paper Return form it has to be filed with the Revenue by 31st October following the end of the tax year. In this case you can leave the Revenue to calculate the tax. However, if you efile a Return which includes your tax calculation the deadline is extended to 31st January.

More stringent penalties begin to apply to 2010/11 Returns that are not filed by the deadline. This could mean that you will pay £1,300 for being 6 months late / more if you leave it any longer. The penalties are:

  • Day 1 - you will be charged an initial penalty of £100, even if you have no tax to pay or if you have already paid all of the tax you owe
  • Three months late - you will also be charged a daily penalty of £10 per day, up to a max £900
  • Six months late - you will also be charged the greater of £300 or 5% of the tax due
  • Twelve months late - you will be also be charged the greater of £300 or 5% of the tax due. In serious cases 100% of the tax due.
  • Late payment surcharges - As well as the late filing charges you will be charged for late payment. The charge is 5% of the tax paid 30 days late, a further 5% if six months late and a further 5% if one year late. Interest on late payment will also be due.

Our initial consultation is FREE. To find out more call us on 01784 243054.

The above information is only a general guide. We cannot accept responsibility for the financial consequences of any transaction that you may undertake or refrain from undertaking based upon the information given on this website.