20 hidden pitfalls of self-assessment

By: Anonymous

Date: 28 January 2014


20 hidden pitfalls of self assessment/FileTax Return post it note on calendar{{}}

  1. You cannot file a self-assessment without a Unique Tax Reference (UTR) number issued by HM Revenue & Customs (HMRC); this is sent in the post by HMRC and takes some time to come.
  2. Not only do you need a UTR but if you want to file your return online you need a logon to the Government Gateway, known as an Activation Code.
  3. The latest date to apply for an Activation Code from HMRC was 21st January 2014.
  4. If you have a UTR but no activation code you may be able to file your self-assessment through commercially available software although you may incur a fee for the use of the software.
  5. An accountant can file a self-assessment for someone with a UTR but without an activation code. Of course they are likely to charge a small fee to provide this service.
  6. A fine of £100 will be automatically applied for any self-assessment not filed on time, regardless of how much tax may be due. Additional fines are imposed if the return is 3, 6 or 12 months late.
  7. If you do file your tax return late HMRC may accept a valid reasonable excuse such as a serious illness or computer malfunction, but the “dog ate my tax return” is unlikely to be acceptable.
  8. You need to complete a self -ssessment if you or your partner receives Child Benefit and your income is over £50,000.
  9. You could pay additional tax for Child Benefit received by your partner or spouse even if you are now separated from them.
  10. No matter how much you earn running your own business you still need to register with HMRC and complete a self -ssessment if you are self-employed.
  11. You may need to complete a self-assessment tax return even if the tax due is nil or if you make a loss.
  12. You could be deemed to be running your own business and be self-employed even if you think it’s just a hobby or something that you do in your spare time.
  13. If you sell regularly on eBay you may be classed as running a business and therefore be self-employed.
  14. You will need to complete accounts and file a tax return up to the date that you stopped trading if you close your business down.
  15. Even if you make a loss on renting out a property you still need to complete a self-assessment.
  16. If you earn over £100,000 you need to complete a self-assessment.
  17. You need to complete a self -ssessment if you receive £10,000 or more from taxed savings and investments.
  18. If you don’t send your tax return in on time HMRC may estimate the tax due and expect you to pay the amount demanded
  19. As at the beginning of November 2013, HMRC had 56 taskforces in operation in their crackdown on tax evaders.
  20. No matter how many times HMRC say otherwise, tax is taxing!

Using 20 years’ experience spent working at some of the UK’s leading businesses, award-winning chartered accountant Elaine Clark is the founder and managing director of www.cheapaccounting.co.uk. Elaine is a regular contributor to BBC's Money Box Live.