Posted: Mon 31st Oct 2011
****Today is the deadline for filing paper tax returns. If you haven't done yours, fear not. HMRC will also accept online returns, the deadline for which is 31st January 2012. Though that's a few months away, it's best to do it sooner rather than later. Emily Coltman, ACA, Chief Accountant at online accounting provider, FreeAgent, explains how to register to file online and why it makes sense. If you're filing your tax return using a paperÂ form, whether you're filling that in by hand or printing it from tax software, you need to get that in to HM Revenue & Customs (HMRC) today if you haven't already done so!
If you've not sorted out your paper return, don't panic. Most people who have to file a tax return do so online.Â That's quicker and easier and means the deadline is later, 31st January 2012.Â That's also when any tax and National Insurance will be due, whether you file online or by using a paper form.
If you want to file your tax return online, you must registerÂ to do so with HMRC - and that's a different process from registering with them as self-employed.Â (HM Revenue, if you're reading this, it would be great if you could please combine these processes!) And what if the tax year that ended on 5th April 2011 was the first one for which you have to file a tax return? You must file it by 31st January 2012 if you're filing online, either via HMRC's online site or through commercial third party software.
I do recommend filing your tax return online.Â For one thing, it's quicker; for another it's kinder to the environment. Perhaps most importantly of all, though, commercial software and HMRC's website will calculate your tax for you. That's not to be sneezed at.Â Working out your tax, by the time you've included National Insurance as well, isn't a walk in the park.
If this is the first year you have to file a tax return, and you haven't yet registered with HMRC to file online, it's a good idea to do so sooner rather than later. This isn't just because it's easy to forget to do it. HMRC has to send you an activation PIN for the online filing service.Â They send this by snail mail and this can take up to seven working days to arrive. You have to register with HMRC and be sent an activation PIN to use even if you're going to use commercial software to file your tax return, rather than HMRC's own website.
So why not make registering a task for November, before the Christmas rush hits?Â Remember, not only will you be very busy in December, but so will Royal Mail, and your activation PIN might get delayed in the post. Don't risk being late in filing your tax return. HMRC has changed the rules so that if you do file your tax return late, you'll pay a Â£100 fine, even if you don't have any tax to pay.Â (Historically, the fine was limited to the amount of tax payable.) And the fines increase the longer you delay filing. You will almost certainly also have to pay interest and penalties if you pay your tax late. Don't give more money than you have to, to Mr Osborne. Register now and file your tax return on time. Emily Coltman ACA is Chief Accountant at FreeAgent, whichÂ provides an online accounting system specifically designed to meet the needs of freelancers and small businesses.Â You can try it for free at www.freeagent.com. Image by Bart Hiddink