Self Assessment - Filing Deadline and Penalty Change

Reed Bunting - Potteric Carr January 2012

As the online filing deadline is fast approaching and there is a change in the penalty regime I thought a reminder might be useful.

If you are a UK taxpayer and need to file a Self Assessment return the deadline is midnight on the 31/01/2012.

This year there is a change in the penalty regime for late filing; even if you have no tax to pay, or have paid the tax you owe there is a £100 penalty for even a day delay in filing. In earlier years the penalty was waived if you had no tax to pay.

The penalties you have to pay increase with the length of delay.

The deadline for paying any tax due is also 31/01/2012 and you must pay any tax you owe by 31 January following the end of the tax year.

For example, for the tax year 2010-11 (ending on 5 April 2011) you must pay any tax you owe by 31 January 2012.

Basic Income Tax and the Artist - Part I -Deadlines

Having been involved with both Income and Corporation Tax for almost all of my working life I thought it might be useful to share some things you need to consider once you begin earning money from your art.

As I am only familiar with the UK tax system this post will be less useful to my international readers with regard to dates etc, but information regarding record keeping applies to all.

I do plan on going into more depth in future posts.

If you're self-employed then you are responsible for keeping records of your income and expenses and paying your tax and NIC (National Insurance Contributions) You might use the services of a Financial Advisor/Accountant but even then the ultimate responsibility rests with you as the individual to ensure that you provide them with complete business records.

1. Important Deadlines

Once you start making money from your art you need to advise HMRC (Her Majesty's Revenue and Customs) within three months of the start date.

(However if you are only receiving small occasional amounts of money it could be classed as a hobby, in that case you would not need to inform HMRC)

If the intent is there to make a profit or you feel your hobby has turned into a business make sure to get in touch with HMRC.

Once you are registered as self-employed you will receive a tax return each year to complete and submit to HMRC, the deadlines for submitting the return are:-

Midnight on 31/10 each year for paper returns

Midnight on 31/01 each year if submitting on-line (or 3 months from the date of the letter advising you to complete a return if you received it after the 31/10)

31/10 if you want HMRC to calculate the amount of tax you owe

The other important deadlines are the dates for paying your income tax:-

All tax must be paid by the 31/01 following the end of the tax year, for example any tax due for the tax year 2010/11 (ends on 05/04/2011) must be paid by 31/01/2012
Any payment on account that HMRC tells you to pay is due on 31/07 (only applies if your liability to income tax is over £1000)

Example

Year Ended 05/04 2011
Liability £1200
31/01/2012 Due £1200 plus £600 (half of the £1200) on account for 2011/12 = £1800
31/07/2012 2nd payment on account £600 (the other half of the £1200)

HMRC estimate the following year to be the same as the current year until they review your tax return or you tell them otherwise.

If anyone wants me to carry this on with what happens in January 2013 if the liability has increased just ask, otherwise I'll leave it relatively straight forward.

The HMRC website is useful if you want any additional information


My next post will be on record keeping, what you need to keep to ensure you pay the right amount of tax.