Do you know what self-assessment is? In case if you don’t, here is the answer for you.

Self-assessment is a system for collecting income tax, which is usually deducted from wages, pensions, and savings. This system is used by HM Revenue & Customs (HMRC).

If in the last tax year (6 April to 5 April the following year), the following cases have been applied to you, you are required to send self-assessment tax return to HMRC.

• You were self-employed
• You got £2,500 or more in untaxed income
• Your savings or investment income was £10,000 or more before tax
• You have made profits from selling things like shares or other chargeable assets and need to pay Capital Gains Tax
• You were a company director
• Your income or your partner’s income was over £50,000 and one of you have claimed Child Benefit
• You had foreign income where you need to pay tax on
• You lived abroad and had a UK income
• You got dividends from shares and are a higher or additional rate taxpayer
• Your income was over £100,000
• You were a trustee of a trust or registered pension scheme

You need to send your tax return using software or paper forms. If you need to send a tax return for non-resident company (SA700) or tax return for trustees of registered pension schemes (SA970), you must use a paper form.

Self-assessment should be registered by 5 October 2015. And, the deadline for sending the paper tax returns is Midnight 31 October 2015 and online tax returns is Midnight 31 January 2016.

If you miss the deadline and do not send a tax return, then you will be charged a penalty of £100. However, if you have a reasonable excuse for not sending your tax return, you can appeal against a penalty.

If you file your tax returns three months late, you will get a penalty of £10 a day following up to the 90 day maximum of £900. A fine of £300 or 5% of the tax due, whichever is greater, is charged when you are six months late. Moreover, a fine of £300 or 5% of the tax due, whichever is greater, is charged when you are twelve months late. Remember, all these fines will be added to the fixed £100 penalty.

If you want any help regarding filing and sending self-assessment tax returns correctly, speak to one of our specialist tax accountants at 020 7060 9556 now.