All operating UK resident contractors who earn an income (regardless of its source) that is not taxed at the time of receipt are legally required to use the self-assessment tax method, which involves submission of details such as the amount of income and capital gains tax.
Some individuals find this quite a difficult tax, even working out how much you owe in tax can be confusing.
However, the HMRC will help you figure out how much tax is due if you ensure that your tax return is submitted before the end of September (30th to be exact). If you are unable to have your return in by this date, you will be required to work out the amount that you owe the government in tax yourself.
As well as finding out that you owe the government some taxes, there is also the possibility that you are eligible for a tax refund. With our CIS Tax Refund service, we can check to see if you are owed money by the government.
Self Assessment Deadlines
The tax year in this country begins on the 6th April each year and runs to the 5th April the following year. However, the actual deadline for submission of your annual tax return is the 31st January, meaning you have around eight months to actually have your return submitted. Failure to have submitted it by this point will lead to initial monetary fines followed by harsher penalties if you fail to submit it at all or if you regularly fail to hand it in on time. You are liable to pay an instant £100 fine if you have not submitted your return by the deadline, although in certain extreme circumstances this may be waived if you can prove that you have a valid reason for this delay.
If the HMRC believe that they have discovered mistakes or errors in your tax return, you may be required to undergo a Self-Assessment Enquiry. This can be time consuming and the inspector will immediately request you send all business records for the previous 12 months. Having looked through your records they will likely request you attend an interview carried out by them which can often take as much as 4 hours and is famously a very stressful experience whilst they grill you on your various financial documents and claims.
Using an Accountant
Some individuals find the whole process quite daunting and don’t even want to start trying to figure out how much they owe in tax, especially with such harsh penalties for mistakes. For this reason, many such individuals choose to seek assistance from qualified agents or accountants who have experience in submitting returns and calculating tax owed.