The self assessment registration deadline is fast approaching; it means that anyone that needs to submit a self assessment tax return for the 2023/24 tax year must register with HMRC by 5 October.
Navigating the rules around self assessment tax can be challenging, especially for taxpayers that need to complete a tax return for the first time. According to HMRC, more than 97% of people now file their self assessment return online. However, while most people are aware that they need to pay any tax owed by 31 st January every year, it seems many people are confused about the deadline (5 October) for registering with HMRC.
Pauline Green, head of product compliance and programs at Intuit QuickBooks has highlighted some of the myths around self assessment to clear up some common misconceptions and help self-employed workers and businesses avoid unnecessary penalties.
Common myths about self assessment
- "The 5 October registration deadline is only for those wishing to file a paper return." This is false. It's for everyone that needs to fill in a self assessment return this year, not just those on paper.
- "You can wait until January to register if you plan to file online." Not true. The 5 October deadline is crucial whether you're filing online or on paper. Missing this deadline can lead to delays and potential penalties.
- "You only need to fill in a self assessment if you are newly self-employed." This is incorrect. You also need to complete one if you are employed but have untaxed income from any other sources.
- "You need to file a return if you have interest from savings and investments. Not necessarily - many savings get taxed at source by the building societies. However, if you hit a certain level of interest you will need to do a tax return.
- "You don't need to file a self assessment return if you're a higher-rate taxpayer." No, even if you're employed and paying higher-rate tax through PAYE, you may still need to file a self assessment return if you have additional untaxed income, such as rental income or large investments.
The truth about self assessment
- Now is the time to decide if you need to submit a return this year and whether you are registered already or will need to re-register (if you didn't submit a return last year) by the deadline of 5 October.
- The enrolment threshold has changed this tax year and is being scrapped altogether next year. Prior to this tax year, if you earned over £100k PAYE you would need to enrol for self assessment. This year (2023/24), this threshold has increased to £150k. However, if you have income from other sources, you need to register before the deadline. If you don't, this could increase your chances of a fine for lateness.
- If you have sold property or assets and made a capital gain, you might need to file a return. If you've sold assets, such as a second property or shares, and made a significant capital gain, you'll need to check if it exceeds the Capital Gains Tax allowance and if so, declare it via self assessment.
- If you miss the 5 October deadline, you'll still need to register and file a return if required. However, delaying registration could lead to fines or complications with your submission.
There is more information about self assessment on the government website as well as video tutorials on YouTube.
Written by Rachel Miller.
