Keeping you up to date on the latest accounting and tax issues

Self-employed should be aware of self-assessment registration deadline

HMRC must know about any new source of income by 5th October in the tax year following it’s establishment. The concern, with only a short time left to register for self-assessment, is that self-employed and gig-economy workers may be unaware of this requirement.

Should you be registered for self-assessment?

For these individuals, work doesn’t always come in a steady stream and assignments may be ‘one-off’, or otherwise very casual. This leads to uncertainty about whether income is or is not taxable. The truth is that even the most casual activity, or one-off job, may be taxable.

The Low Income Tax Reforms Group (LITRG) is concerned that self-employed and gig-economy workers may not fully understand their responsibilities. Even where no Income Tax or National Insurance is due, HMRC should still be notified of any new income. In these instances, preparing and filing a self-assessment tax return may still be necessary.

You can find out if you need to register for self-assessment and send a self-assessment tax return here on the GOV.UK website.

Failure to notify HMRC and failure to prepare and submit a return accordingly may result in financial penalties. 

Where the 5th October deadline is missed, the individual should still register for self-assessment as soon as possible. If the tax owed is paid on time (31st January 2018), then penalties may not be imposed.

Simple assessments

In the same week, as various reminders emerge about self-assessment, HMRC also began to rollout simple assessment notices. These notify taxpayers of Income Tax or Capital Gains Tax due without the need for a tax return submission.

HMRC will only issue these in straight-forward cases, where it has access to all the 3rd party information it needs.

Although this seems to be a step towards improving the efficiency of the tax system and making it easier for the taxpayer to navigate, it is not entirely failsafe. If a taxpayer receives a simple assessment notice, it is vital that they carefully check the details that HMRC has used for its calculations and ultimately whether they agree with any amount owing as a result.

HMRC are allowing a 60-day period, within which taxpayers must query a notice if they believe it to be incorrect. We urge taxpayers to engage swiftly upon receipt of a simple assessment notice. If you fail to query the notice within 60 days, you cannot appeal and you must pay any tax due.

Here at George Hay, whether self-assessment or simple assessment we can help you to fulfil your obligations. Contact us today on 01767 315010, to find out more.

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