Legal Considerations For Filing Your Self Tax Return
Whether you are self-employed or work for a company, you have to pay tax on your earnings. Filing of tax return on time is essential, as HMRC imposes a hefty penalty for late tax filing. But, due to the time consuming manual process of calculating the income Tax, people often run late, thus have to pay an additional amount then what they are entitled to.
Late tax payment is common when you go for self-assessment as compared to when the salary is deducted at source. The reason, being in self-assessment you have to calculate your taxes. While in case of TDS, it’s the employer who carries out the tax work for you. But, by making use of the tax calculator, you can now bid farewell to your tax woes. The calculator automatically calculates your tax payment in less than a minute. But, before you file your self-assessment tax return, you must be aware of the legal points.
Stay away from late tax filing and late payment of taxes
Due to the challenging work schedule, people often miss the tax deadline, resulting in the imposition of the hefty penalty. If you miss your deadline for filing of paper tax return, you have the option to file the return online. For filing tax online, you require the self-assessment account. For creating the account, you have to register with the HMRC. They will send you a 10- digit number, (UTR) for setting up your account for the self-assessment online service. Also, you have to gather all the information that you need for filing the tax return.
Penalties for late payment of taxes
According to the HMRC, there is an automatic penalty of £100, for the late filing up to 3 months. For the next 3 months, it will be £10 per day and greater of 5 % of the tax due. Note, that this tax rule also applies if you there is no tax due. There is a penalty of 5 % for late payment of tax after 30 days. In addition to this, there is 5 % every 6 months and 5 % after 12 months.
Ensure your tax return is accurate
Not only the late filing of tax, but incorrect tax calculations can also lead to the penalties. If the errors in tax calculations are due to your negligence or carelessness, you can’t escape from the penalties. The penalties are between 30 % and 200 % on the tax you miss. But, these penalties are subjected to reductions in case of disclosure. But, in the case of serious dishonesty, you may have to face jail time or pay hefty fines.
You should never be dishonest
Show utmost honesty while filing your tax returns. Paying more is better than hiding your tax due as it will lead to penalties. HMRC has a way of finding whether there is any discrepancy in your tax payments. So, instead of hiding, you should highlight all your earnings and pay your tax due correctly.
If calculating your Income tax, gives you a headache, it’s time to switch over to the tax calculators. The online calculator is easy to use and speeds up the process of tax calculation. Also, take into account every legal point, to ensure you don’t face any legal problem.
