Our friends at HMRC have been in touch once again, to help our community debunk some of the widespread misinformation that surrounds Self Assessment tax returns.

HMRC tells us that these myths can lead to missed deadlines, unexpected penalties, or people failing to claim money they are entitled to. And of course we know from all the older people who get in touch with us asking for assistance with tax matters, that worries about dealing with taxes can be a really upsetting issue for some people in our community

To help clear things up and give us a better understanding of Self Assessment, HMRC has provided the facts to bust common myths about Self Assessment: 

Myth: “I have to wait until 31 January to submit a Self Assessment tax return.”  

Fact: You can submit now and avoid last minute stress.  

Myth: “There’s no benefit to me by submitting my Self Assessment tax return now.”  

Fact: If you’re due a refund, HMRC can process it sooner and you’ll receive the money faster. Early filing means you won’t have to rush at the last minute to file by the deadline, You’ll also know what you owe, so you can plan or set up a Budget Payment Plan. And you can also use your return as proof of income for things like loan, mortgage and benefit applications.  

Myth: “HMRC hasn’t contacted me, so I don’t need to file a tax return.” 

Fact: It is your responsibility to work out whether you need to file a Self Assessment tax return. Many people need to register and file because they received  self employment income, untaxed income, foreign income or partnership income. They may also need to complete a return to claim certain tax reliefs. You can check if you need to file a tax return by using the online checker.  

Myth: “I have to pay my tax bill as soon as I submit my return.” 

Fact: Incorrect. Filing early does not mean you have to pay early. Even if you submit your return early, the deadline to pay the self assessment  tax bill is not until 31 January following the end of the tax year. HMRC also allows payments to be spread using a Budget Payment Plan. You retain full control over when you pay, and you can use options like instalments or payment arrangements to spread the cost. 

Myth: “If I don’t owe any tax, I don’t need to file a return.” 

Fact: If HMRC sent you a letter telling you to file a tax return, then you will either need to file one by the deadline or agree with them that you don’t need to file. You may still need to file a return even if no tax is due. Not filing when you are required to, can still result in you incurring penalties.  

Myth: “HMRC will automatically remove me from Self Assessment if I no longer need to file.” 

Fact: HMRC will not automatically remove you. If you stop being self-employed or no longer need to file a return, you must tell HMRC – don’t assume they already know, or somebody else will tell them. Otherwise, HMRC may expect a return and will issue a late filing penalty  if that return is not filed on time. Information on how to do this is available on GOV.UK  

Myth: “Self Assessment is only for full time self-employed people.” 

Fact: Self employment is only one of the reasons why someone may have to file a Self Assessment tax return. Other reasons include  people with side income over certain thresholds; partners in business partnerships; people with significant untaxed income; or people receiving foreign income. Certain tax reliefs are also claimed through completing a Self Assessment tax return. Being a PAYE employee does not automatically remove the need to file a return. The best way to find out if you need to file a tax return is to use the checker on GOV.UK. 

Myth: “If I make a mistake on my tax return, I’ll automatically be fined.” 

Fact: Incorrect. Genuine mistakes can usually be corrected by you or by HMRC. After you have filed your return you then have a 12 month window to make any amendment to that return, which starts from the applicable filing date for that return Penalties for inaccuracies on a return generally depend on whether they were  careless, deliberate, or deliberately concealed. Honest errors corrected promptly are treated more leniently.  

Myth: “Self Assessment is only about paying tax.” 

Fact: Self Assessment returns are filed for a number of reasons. Some people complete them to claim job related expenses, or to claim tax relief on pension contributions. Some people may have paid too much tax in a year and filing their return enables them to get that overpaid tax refunded. Self Assessment is also a way for Self Employed persons to pay (or get credit for having paid) Class 2 National Insurance Contributions, which provide entitlement to certain benefits such as the State Pension.   

And if all of this sounds like too much for us, then HMRC reminds us that we can appoint somebody to deal with your tax affairs on your behalf such as relatives, friends, or accredited accountants. We have some free checklists that can help you get the conversations started. Or you can email us at admin@opaal.org.uk

AND if you prefer not to manage your tax affairs online, you can contact HMRC by phone on 0300 200 3310 (or +44 161 931 9070 from outside the UK), Monday to Friday 8am to 6pm, or write to: Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom