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It is a fundamental part of the self assessment system that responsibility lies with you, the taxpayer, to file Returns and pay the right amount of tax, at the right time-- you must not wait for HM Revenue & Customs to ask. |
Tax returns
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Tax returns covering income for the year ending 5 April 2011 will be issued on or after 6 April 2011, and will consist of a main tax form and backing schedules. Your tax office will send out what they think are the relevant schedules. If you need other schedules you will have to ask for them. The completed full return has to be submitted to HM Revenue & Customs by the 'filing date', which is 31 October 2011 for paper returns, and 31 January 2012 for online returns. |
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You should note that your return must be completed as far as the total income on which tax has to be paid. Figures must be given for every item, even if only estimates. It is not possible to enter question marks or leave the tax inspector to decide whether an item is taxable or not. The only section that can be left for the tax office to complete is the actual calculation of the tax due on your total income. |
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If you have taxable income or capital gains for 2010-11 and have not received a tax return, you must advise your tax office by 5 October 2011 at the latest. |
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There are automatic penalties for late filing of tax returns. Failure to submit the tax return by the filing date (see above) incurs a £100 penalty. If it has still not been returned six months later, a further £100 will be charged. However, the penalties charged cannot exceed the total amount of tax due. In the most serious cases, there are provisions for penalties of up to £60 a day. |
Amendments, enquiries, and record keeping
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You have one year from the filing date to make any amendments to the return. HM Revenue & Customs may correct obvious errors or mistakes within nine months of receipt of the return. |
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Within a period of one year from the date the tax return is submitted, HM Revenue & Customs have a right to make enquiries to check that the tax return has been correctly completed. No reason for the enquiry need be given. |
All records relating to the return should be kept during this one-year period. If trading or rental income is involved, all records should be kept for a further four years.
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Determinations
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If a return is not submitted by the due date, HM Revenue & Customs can, within five years of the filing date, make an estimate to the best of its information and belief of the amount of tax due. This amount of tax will be payable without appeal, but will automatically be superseded when the return and self assessment are sent in. |
Payment of tax
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Payments on account of income tax (and Class 4 national insurance contributions) for a particular tax year will be due on 31 January in the tax year and 31 July following the end of the tax year. These payments will be based on one half of the total income tax liability (less any tax deducted at source) for the previous tax year. You have the right to reduce payments on account if you believe the income tax for the current year will be lower than that for the previous year. However, you may be charged interest if the reduction is more than it should be. Payments on account will not be required where each payment works out at less than £500. |
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Example:
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Tax year |
Final liability etc
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Payments on account
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Balance due
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2009-10 |
£6,400
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£5,500
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£900
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2010-11 |
£7,200
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£6,400
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£800
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2011-12 |
£7,800
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£7,200
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£600
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Amount due |
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Payment date |
On account
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Balance
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Total
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31 January 2011 |
£3,200
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£900
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£4,100
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31 July 2011 |
£3,200
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--
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£3,200
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31 January 2012 |
£3,600
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£800
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£4,400
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31 July 2012 |
£3,600
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--
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£3,600
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31 January 2013 |
£3,900
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£600
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£4,500
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Surcharges and interest
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An automatic surcharge of 5% will be levied on any 2010-11 tax outstanding at 28 February 2012, and a further surcharge of 5% will apply to any tax still outstanding at 31 July 2012. There is a right of appeal against the surcharge on the grounds of reasonable excuse |
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In addition, interest will run on tax (and surcharges and penalties) paid late, from the due date of payment to the actual date of payment. HM Revenue & Customs will pay interest on amounts overpaid, from the date of payment (or the due date if later) to the date of repayment.
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Self assessment for employees
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For employees, self assessment is not too drastic. The PAYE system means most employees should pay the correct amount of tax at source. An employee with relatively straightforward tax affairs is unlikely to be asked to complete a tax return. |
Tax codes
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The main cause of under or overpayments of PAYE is actual benefits in kind being different from the estimates included in the tax code. If there are underpayments of tax, they may be collected by direct demand or, if modest, carried forward as an adjustment to their tax code for the next tax year, but one. Self assessment allows underpaid tax of less than £2,000 to be carried forward in this way. For online returns you must file your return by 30 December following the end of the tax year. |
Information deadlines
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So that employees can complete their tax returns properly, information deadlines are imposed on employers: |
 Forms P60 must be provided to employees by 31 May following the end of the tax year |
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Copies of forms P11D and P9D must be provided to relevant employees by 6 July following the end of the tax year |
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Form P45 has a part for the employee to retain |
Table of key dates
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| 31 October 2010 | - deadline for filing 2009-10 paper returns |
| 30 December 2010 | - tax return to be filed online if you want a tax underpayment of less than 2,000 collected via your 2012-13 PAYE code |
| 31 January 2011 | - online tax return for 2009-10 to be submitted |
| - payment of balance of income tax for 2009-10 |
| - payment of capital gains tax for 2009-10 |
| - first payment on account of 2010-11 income tax (normally half the total 2009-10 liability, adjusted for tax deducted at source) |
| 31 July 2011 | - second payment on account of 2010-11 income tax |
| 31 October 2011 | - deadline for filing 2010-11 paper tax returns |
| 30 December 2011 | - tax return to be filed online if you want a tax underpayment of less than £2,000 collected via your 2012-13 PAYE code |
| 31 January 2012 | - online tax return for 2010-11 to be submitted |
| - payment of balance of income tax for 2010-11 |
| - payment of capital gains tax for 2010-11 |
| - first payment on account of 2011-12 income tax (normally half the total 2010-11 liability, adjusted for tax deducted at source) |
| 31 July 2012 | - second payment on account of 2011-12 income tax |
| ... and so on. | |
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