It`s time to get that Self-Assessment in!
It’s a job nobody wants to tackle, but if you’re a contractor who submits your Self-Assessment online, then the deadline of 31 January 2018 is fast approaching. This is the deadline for the 2016/2017 tax year.
If you’re new to the contracting game, or just need a reminder, we’ve put together all of the info you need to know about meeting the deadline, what will happen if you don’t, and some tips on making it easier next time.
How to meet the Self-Assessment deadline
This bit’s easy. You (or the person who takes care of your accounts) must submit your online Self-Assessment by midnight on 31 January 2018. If you submit a paper tax return, this should have been done back in October so, at this point, you can only submit online.
What happens if you fail to meet the Self-Assessment deadline?
If your tax return is submitted up to three months late then you get an automatic penalty of £100 on top of your tax bill. This stays the same whether your Self-Assessment is one day late or a full three months late. Obviously this is an added expense that you just don’t need, so it pays to get your tax return in on time.
After the three-month point, the penalties start to accrue more rapidly. If you’re between three and six months late, you’ll be charged an additional £10 per day for every day it is late up to £900. Between six and twelve months late, you’re charged a further penalty of either £300 or 5% of your tax bill, whichever is greater. This is then repeated if you are over 12 months late. These penalty charges accumulate, so you could be liable to the tune of £1,600 or more.
And, of course, late submission of Self-Assessment could then mean your payments are late, for which there are additional penalty charges. As you can see, it pays to be organised and get your online form in before the deadline.
How can you make things easier next tax year?
The best way to make things easier is to be organised and not leave everything until January. Once a tax year is over and your accounts are in order, you’re free to complete and submit your Self Assessment. Depending on the business model you use as a contractor, your accounts won’t always be prepped and ready to go on 6 April, but they’ll probably be ready long before January 2019.
So, once the 2017/2018 tax year comes to a close, spend some time getting everything in order and get your tax return in nice and early so there’s no worrying about deadlines.
At Kingsbridge, we have years of experience working with contractors and freelancers to get them the best insurance deal for them. Contact our friendly team on 01242 808740 or, for more in-depth information on contract insurance, explore our Knowledge Hub to find out everything you need to know.