HMRC deadline warning as workers need to take action by July 31, 2024

HMRC deadline warning as workers need to take action by July 31, 2024

Self-employed workers need to meet a July 31 HMRC payment deadline if they pay their tax bills in advance of the annual January 31 cut-off

Workers are being warned that they need to take action by next week to avoid penalties from HMRC. It comes after 1.1 million self-assessors failed to file their 2022-23 tax return on time in January.

Now, the next deadline is looming within days on July 31. This deadline affects those who make payments in advance towards their tax bill instead of paying in full at the end of January.

Anyone who doesn't meet the deadline faces a late-payment fine, which starts at £100 if your tax return is up to three months late. It then accumulates interest after that time.

HMRC will consider some reasons for late payments - such as being laid up in hospital or a postal problem - but most common excuses won't cut it. For example, if your payment fails or is late due to the payment bouncing as a result of not having enough money in your account, making a mistake on your tax return, or having issues understanding the system, you will still be penalised.

Kyle Eaton, money.co.uk business bank accounts expert, has offered his tips to help self-employed workers prepare for their upcoming tax payment. First, he said money management was key.

Kyle said: "It’s vital that self-employed workers are diligent in managing their money, documenting all business finance information and being able to accurately report on it when required. Having a dedicated business bank account is wise to enable this and avoid any confusion or additional admin in separating personal and business finances.

He said that keeping on top of deadlines was very important, adding: "In addition to financial preparation, it’s crucial to note the relevant deadlines each year and start the reporting and payment process as early as possible to minimise the risk of errors or missing deadlines. Identifying the key dates and setting reminders can alleviate one of the biggest reasons why tax returns are either not filed at all or are wrongly submitted - which is that insufficient time was allocated to it."

Kyle also gave advice on submitting returns correctly, adding: "You can still submit your return if you can’t calculate your exact tax margins, such as a different accounting period, to ensure you still meet the deadline. Simply estimate the figures and inform HMRC that you've used provisional figures - you can then adjust your return with the actual figures by contacting HMRC within 12 months of the self-assessment deadline. However, remember that if your estimates are off, you’ll need to pay interest on the difference. This interest is calculated from the original due date for payment.

“Being self-employed comes with many benefits, but also requires workers to complete additional tasks usually taken care of by employers - such as tax returns. That said, you don’t have to do everything on your own, you could hire an accountant to take some of the pressure off. You could also consider getting a business current account, as these often allow integration with accounting software and can make the process much easier.

“When you’re freelance or self-employed, it’s also vital to protect your income and budget accurately, as you don’t have the same level of income guarantee as an employed person. Therefore proper money management and adhering to deadlines like this one is key in preventing additional costly expenses, in the form of fines and interest, resulting from late or inaccurate payments. By using these tips, you can ensure you complete your tax return accurately and on time to protect yourself and your business.”

This article is sourced from the following link:

https://www.mirror.co.uk/money/hmrc-deadline-warning-workers-need-33302887