Have you complied with your tax obligations for the 2011/12 tax year? Those of you who have simple affairs and pay your tax under Pay As You Earn (PAYE) can probably relax. But what if you received untaxed income between the 6th April 2011 and the 5th April 2012 and Her Majesties Revenue and Customs (HMRC) are unaware of it. Perhaps you have rented out the house you inherited a few years ago or maybe that hobby of yours is starting to make some money. You may even have sold that inherited house or started to receive a foreign pension.
The deadline for notifying HMRC about income that has a liability for tax is 5th October following the tax year in which you received the money. So for the 2011/12 tax year that was 5th October just passed. HMRC may apply penalties for late notification and these are based on a person’s behaviour, so the quicker you act the better.
By notifying HMRC about this income you are effectively registering yourself for self assessment (SA). HMRC can then decide which type of return you need to complete. There are three ways you can do this:-
- Phone HMRC on 0845 300 0627 or on the SA helpline 0845 900 0444
- Online via the HMRC website
- Complete form SA1 – Registering for self assessment
If your preferred way of completing and filing your tax return in on paper then you will need to tell HMRC when you register. However, it is already too late for the 2011/12 tax year as the filing deadline is always the 31st October following the end of the tax year. If you file on paper now you will receive an automatic £100 late filing penalty. You can appeal this, but you do need a good reason. Online filing is the answer, extending your deadline to the 31st January 2013 for your 2011/12 self assessment. Please don’t leave it till the last minute. Once you have registered it can take up to two weeks to receive your activation pin allowing you access to the online facilities.
Penalties for not filing a self assessment on time came into full force for the first time this year. A £100 fine soon turns into £1300 if action to file is not taken quickly. Daily penalties start once a return is 3 months late and continue at £10 a day for a maximum of 90 days (£900) when a further £300 is added. It doesn’t stop there and further penalties are geared to the amount of tax owed. The only way to stop it all is to file your return. It is worth remembering that if you are registered to file your return on paper those daily penalties will start on the 1st February 2013 and any appeal you might want to lodge cannot be started until your return is filed.
It can all be a bit daunting but it is better to think about it now and get help rather than to hide it away in the hope that HMRC won’t notice. They generally catch up with you in the end………..
This article is by Tax Help for Older People registered charity no 1102276, offering free tax advice to older people on incomes below £17,000 a year. The Helpline number is 0845 601 3321 or geographical 01308 488066.