I don’t think I will be able to pay my self-assessment tax in January 2023. What should I do?

Every year, at midnight on January 31, you must complete your online Self-Assessment and pay any due taxes. Although most self-employed individuals these days opt to submit their Self Assessments online, it is still feasible to do so using paper forms, which was the traditional method.

Be advised, however, that the deadline is sooner if you file a paper tax return tax accountants in UK. Also, HMRC must receive this by October 31 of each year. There are potential additional fines if you don’t submit your tax return on time and pay any taxes owed. Therefore, even if you need to alter your tax return later, file as soon as possible and pay any taxes you owe using the information you have.

What is the penalty if I submit my self-assessment after the due date?

HMRC automatically imposes a £100 penalty on everyone who must file a return but misses the deadline. If you already have an internet account, the fine will be present.

Whether you owe tax is irrelevant; the penalty is still there. HMRC may levy an extra £10 daily penalty for the following 90 days. It is if you don’t file within three months, bringing the total penalty up to $1,000.

After six and twelve months, additional fines are assessed. If there is a substantial amount of unpaid tax, these fines may depend on the amount of tax you owe. You will also be assessed interest on unpaid taxes and these penalties.

Key Facts To Consider

  • The 2021/22 Self-Assessment tax return filing and payment due date is midnight on January 31, 2023.
  • However, suppose you didn’t submit your Self-Assessment tax return by midnight on January 31, 2023. In that case, it won’t be necessary to pay a late-filing penalty (typically £100 as soon as it’s late) as long as you do so before February 28, 2023.
  • Ordinary penalties take effect after February 28.
  • If you submit in full or establish a Time to Pay plan before April 1, 2023, you won’t be subject to a late payment penalty if your tax payment is past due by January 31.

Is It Possible To Still Give A Paper Self-Assessment?

You can, of course. You can still file a paper return even though the HMRC closing date for paper filings is three months earlier, on October 31 every year, if you’d prefer not to or are unable to complete an online self-assessment. But, the same penalty structure is in place if you need to remember to do that and instead submit a paper return after the deadline of October 31. Do so online to avoid consequences if you submit your paper after the deadline.

Can I Avoid A Self-Assessment Penalty?

If a person has a “reasonable justification,” HMRC claims it will waive the late filing penalty; nevertheless, this decision is at the authorities’ discretion.

If a close family passed away just before the Self-Assessment deadline, you were extremely unwell, or you had significant IT issues, you could avoid a penalty. Penalties may be less if you cannot file taxes owing to problems with HMRC’s online systems.

However, HMRC asserts that it will not lessen penalties for anyone who considers the Self-Assessment system too challenging or who, for instance, did not get an official reminder.

Preventing Future Issues

The hardest part of the procedure is signing up for Self-Assessment. If you remember your password and username, filing taxes in the future should be much simpler.

After the deadline for filing tax returns on January 31, you must maintain your records for at least five years. HMRC may review your records to ensure that you are paying the appropriate amount of tax.

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