Act now to meet the tax return filing deadline

The Chartered Institute of Taxation (CIOT) is urging taxpayers to complete their online Self-Assessment (SA) returns in good time ahead of the January 31 deadline or risk a £100 fine.

The deadline for sending the 2015/16 tax return to HMRC and paying any tax owed is 31 January 2017. Last year, 10.39 million SA returns were filed on time,1 but 870,000 people missed the filing deadline leaving themselves facing a £100 penalty. With self-employment in the UK now at record levels,2 it is expected that more people than ever will be required to file a SA return this year.

The tax institute points out that this is the first year that taxpayers can submit their tax return using their Personal Tax Account.3  And with the introduction of the Government’s Making Tax Digital programme from April 2018, this year will also be one of the last times that the SA return will have to be submitted in its current format.

As in previous years, the SA return can also be filed using a HMRC Online Account which can take up to ten days to set up.

John Cullinane, CIOT’s Tax Policy Director, said:

“Greater numbers of people in self-employment is a growing feature of the UK’s economy and unfortunately, one of the first things they need to think about in 2017 is tax. We urge self-employed people not to begin their new relationship with HMRC with a £100 fine by taking advantage of the tax authority’s online offerings, such as accessing their new Personal Tax Account to submit their SA return and follow the guidance on

“Anyone who is self-employed is required to file a SA return, whether they are a sole trader or in partnership. This includes people who work in the ‘Gig Economy’ or have a second income from trading on EBay and similar websites.  Likewise, anyone receiving income from renting out property through sites like Airbnb may also need to file a tax return.  The Government has recently announced the introduction of a £1,000 tax free allowance for both trading and property income but taxpayers should note that these do not apply until April 2017, so will not affect the 2015/16 tax return.”

Further information about who must send a tax return can be found on the HMRC website.4  Last year, hundreds of thousands of taxpayers failed to file on time. This is entirely avoidable as the online process is relatively straightforward to use.5

Taxpayers should:

·                     Register for SA if they have not done so already (this should have been done by 5 October)
·                     Register for an online HMRC account
·                     Complete and file their SA tax return

The first step is to register for SA which can take up to ten working days because it involves HMRC sending out a Unique Taxpayer Reference (UTR) number which they will need before they can enrol for the SA online service. The online account can take up to ten working days to complete as it involves HMRC sending out an activation code in the post.

John Cullinane continued:

“Our message to taxpayers is not to leave things to the last minute. If they think they might miss the deadline and have a genuine excuse, they should contact HMRC as soon as possible before 31 January to discuss their case so they can potentially avoid a penalty after this date.

“For the first time, taxpayers can this year complete and file their SA return via their Personal Tax Account. The Personal Tax Account can be accessed using GOV.UK Verify which takes about ten minutes to set up with the right information, but we know that many taxpayers have found this process difficult. The alternative is to set up a Government Gateway account which can take up to ten working days, although if you have used HMRC’s online services before you will already have one.

“HMRC has recently been putting in more resources to help taxpayers who have queries or need other assistance with their returns. Even so, getting through to HMRC’s helplines in the final few days may take longer than normal; this is another reason why getting the return out of the way before the final week makes sense.

“We recommend that those in any doubt about their status or obligations seek the advice of a tax adviser.”

Taxpayers should note that if they miss the 31 January deadline they will be fined £100, regardless of whether they actually owe any tax. If the return is still outstanding after three months a charge of £10 per day for the next 90 days will be applied. No penalty is due if the taxpayer has a ‘reasonable excuse’ for filing their tax return late.  Any tax due must also be paid by 31 January to avoid interest charges and penalties.

Notes for editors

1.                   See HMRC’s published figures here.

2.                   The Resolution Foundation's Earnings Outlook, published in October 2016 found that Britain's self-employed has grown by 45 per cent since 2001/02, link here. Furthermore,  the ONS’ Trends in self-employment in the UK: 2001 to 2015 states that the level of self-employment in the UK increased from 3.8 million in 2008 to 4.6 million in 2015.

3.                   To access your Personal Tax Account, please click here.

4.                   Further information about who is obliged to complete and send in a tax return, including establishing whether you are required to file, a link to registering for and filing your SA return, can be found here.

5.                   For further information and to set up an online HMRC account, please click here. 

6.             HMRC Press Release My tax return was on my yacht…which caught fire  here.

7.             The Chartered Institute of Taxation (CIOT)

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.
The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.
The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.