If you have recently become self-employed now is the time to start focusing on your next steps towards tax compliance.
As a freelancer, sole trader or self-employed individual, one of the most important aspects of your working life is keeping on top of your tax responsibilities, as it is now your responsibility to notify HMRC of your earnings and work out how much tax and national insurance you have pay.
If you have earned income through freelancing, being self-employed or even as a landlord in the last tax year which runs from 6 April 2017 to 5 April 2018 then you must register for self-assessment by 5th October 2018.
Failure to do so before the cut-off could result in HMRC imposing significant penalties unless tax is paid in full before January 31st, which is the next online tax return deadline date.
Rosy Hughes, Burgis & Bullock’s head of tax, said: “The move into freelance or self-employed living can be quite stressful at first, so it is crucial to ensure you avoid potential penalties at such an early stage of your journey.
“For those who have never had to register a self-assessment before, it can be a timely and complex process so now is the time to start working on that.
“There is no reason to miss these deadlines and we are able to help make sure you keep on top of everything and can continue to focus on what matters most to you.
“You should think carefully about leaving the registration any later because if anything goes wrong and you’re unable to register by the deadline, you could find yourself with a very large bill.”
For those who have been self-employed for a number of years, the digital tax revolution is the most crucial deadline on the horizon but paper based tax returns can still be handed in ahead of the usual October 31st deadline this year.
However, if you choose to take the leap towards digital tax now, you will have an extra three months, with the final deadline for online returns not until January 31st.
Despite the extended deadline, you should allow plenty of time to get to grips with the software, interfaces and procedures required to ensure you avoid HMRC penalties
In the long-run, the Making Tax Digital scheme will no doubt make the whole process of keeping on top of tax requirements much easier to navigate and much more transparent in terms of record keeping.
But for now, the old rules still apply if you want to carry on filing your returns by paper.
“Paper tax returns received on or after November 1st will result in a £100 fine, even if you haven’t got any tax to pay.
Rosy Hughes, head of tax services at Burgis & Bullock, said: “The Making Tax Digital move is on the horizon now, so it could be a wise decision to get on board early.
“Filing online instead of on paper means you can get an automatic calculation, faster processing and a three-month extension on the paper tax return deadline.”