Now that summer holidays are almost over, use that “Back To School” feeling to get your tax affairs in order.  This year, the due dates for personal tax returns have changed and the first relevant date is 31 October 2008.

Self-assessment tax returns

For the tax year 2007/2008 (i.e. that running from 6 April 2007 to 5 April 2008), your income tax return must be submitted by 31 October 2008 if you are submitting a paper return.

However, if you wish to file online, you still have until 31 January 2009 to submit this tax return.

In both cases, if HM Revenue & Customs (HMRC) only send you a notice ordering you to submit a tax return after 31 July (for paper returns) or 31 October (for filing online), then you have three months from the date of this notice to submit your tax return.

Informing HMRC of new sources of income

However, it is still your duty to inform HMRC when you start to receive sources of income which mean you should complete a tax return, for example, if you become self-employed or if you receive a new form of income such as rental income.  Failure to do this can result in penalties.  The general rule is that you must inform HMRC by 5 October following the tax year in which you first received that income. 

In the case of becoming self-employed, you should have already informed HMRC of this, within three months of starting to trade. 

Calculation of tax due

The tax return should include details of all income and gains in the year, including income from an employment or self-employment, interest, rental income etc.  You then have to run through a calculation to work out how much tax is due as a result.

However, if you want to file a paper return, provided you do this by the due date of 31 October (or within two months of a notice to deliver a return if later), then HMRC will calculate the tax due for you. 

Tax will automatically be calculated for returns filed online.

Penalties

Failing to submit your tax return will lead to an automatic penalty of £100.  If the return is more than six months late, this increases to £200.  There are also other daily penalties that HMRC can impose.

If the return is more than a year late, then a penalty based on the actual tax liability can be imposed.

Payment of tax

There’s not space to talk about this here, but don’t forget that you do have to pay your tax too.  More of that another time.

As with all our information in The Business Lounge, this does not constitute comprehensive tax advice, and The Business Lounge takes no responsibility for your reliance on its content; to discuss how these issues affect you, contact your accountant.