Missing self-assessment deadline proving a costly mistake

The final deadline for the 2013/14 tax year is looming and there are instant financial penalties for missing it.

Although an estimated six million people have filed their return so far, around another five million still haven’t done so with just a couple of weeks remaining before the midnight deadline on January 31.

And we advise you not to leave it until the last minute either, because completing your return can take a huge amount of time, especially if you have never done it before. If you do miss it there will be a £100 fine.

Fortunately, most people have their income tax and national insurance deducted at source under pay–as–you–earn (PAYE), and probably do not need to complete a tax return.

However, around 11 million people do have to complete a return. If you have other sources of income, such as dividends from company shares or rent from a property, you may have to declare that to HM Revenue & Customs (HMRC).

Company directors, the self-employed and partners in a business usually need to file a tax return. Also, families that receive child benefit may also need to act if one parent or carer earns more than £50,000 a year.

Basically, if HMRC has issued you with a tax return, or sent you a notice to submit a tax return, then you must do so.

It is the way that nobody likes filling in forms, especially for the taxman, but you have to get started straight away and you must not leave it until the 11th hour.

It is already too late to submit a paper–based return; that deadline passed on October 31 last year. This means you have to submit your return online, which means you need to set up an account with HMRC. If you have not done this before, setting up a new one could force you past the looming deadline.

It can take up to two weeks for HMRC to post you a Government Gateway activation code, so do it now if needs be.

The return itself can be awkward, as you have to gather relevant information such as pay slips, bank records, etc.

Also be warned that HMRC’s website can be unreliable, especially as the volume of traffic increases with panicky individuals try to complete their return at the last minute.

Getting through on tax phone lines is even harder, with HMRC recently asking people to tweet their queries rather than call: some people have spent up to two hours on hold. They have admitted that 2.4 million calls went unanswered altogether in September.

When you are completing your tax return, you’ll need to quote your 10–digit unique tax reference code, which you can find on any HMRC paperwork, such as your notice to complete a tax return.

So the message is simple. Don’t delay and act today. Good luck.