Self Assessment Tax Return: a Guide to Meeting the 2023 Deadline

Self Assessment Tax Return: a Guide to Meeting the 2023 Deadline

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In an ideal world, we would be able to go about our business endeavours without paying tax and keeping what we earn but for the vast majority of us, that’s just not possible. And if we wish to live in a fairer society then paying taxes is also the responsible thing to do.

For the many people whose tax is collected solely through PAYE (Pay As You Earn), the end of the tax year means very little other than their payslips informing them how much they have paid for 12 months. But, for others who work for themselves, run their own company, have a second job such as freelance work, or have a secondary income; a Self Assessment is essential for paying their taxes.

A Self Assessment involves taking control of your finances and reporting your incomings and outgoings to HM Revenue and Customs (HMRC). It’s a job many people put off until absolutely necessary, which can cause a headache when the Self Assessment UK tax return deadline looms large (on the 31st January 2023).

What is Self Assessment

Self Assessment is a system used by HMRC to collect information from individuals and businesses regarding their income and tax liability. Those people and organisations will find themselves submitting a Self Assessment Tax Return to HMRC each year covering their income, expenses and capital gains for a particular period.

This typically involves filing financial records for the financial year, which runs from April to March, covering a 12-month period. All of this financial information combined is used to calculate how much tax is owed by that person or organisation to the government. Failing to properly file your taxes, or missing the impending deadline carries a financial penalty.

It pays to be organised and the gathering of your financial records for Self Assessment is made easier if you have a financial advisor to assist you. To get a head start on your Self Assessment, consider an accountant who can find tax solutions that help you pay less through tax compliance checks and identifying tax credits.

Who needs to submit a Self Assessment?

Most people in the UK pay all of their taxes through PAYE, meaning it is paid when earned and there is no need to file a Tax Return. However, in 2022 more than 10.2 million people filed a Self Assessment Tax Return by the deadline – representing approximately 7% of the population.

People must file a Self Assessment Tax Return if the following applies for the tax year:

  • You earned over £1,000 as a self-employed ‘sole trader’ (before taking away any tax relief claims)
  • You were a partner in a business partnership
  • You earned £100,000 or more

More criteria apply to untaxed income and you may need to complete a return if you have received the following during the 2021/22 tax year:

  • Money from a rental property
  • Tips and commission
  • Foreign income
  • Income from savings, investments and dividends
  • Some Covid-19 grant or support payments
  • Child benefits if your income was over £50,000

Finally, a Self Assessment may need to be completed to:

  • Claim some Income Tax relief
  • Prove you are self-employed to claim other allowances, such as Maternity Allowance

When is the Self Assessment deadline 2023? (or for 2021/22?)

For people and businesses filing their Self Assessment Tax Returns, the deadline of 31st January 2023 is when they must have all of their affairs in order. This deadline is concerned with the Tax Returns for the 2021/22 tax year, which runs from 6th April 2021 to 5th April 2022. That doesn’t leave much time for business owners and self-employed individuals to go through their accounts with a fine-tooth comb.

The 31st January deadline is for the filing of online tax returns, it is also the deadline for paying the tax that you owe. If you choose to file your taxes by paper, the deadline was 31st October 2022 and your only choice is to complete your Self Assessment digitally. If you have not yet registered for Self Assessment for the tax year 2021/22, you have missed the registration deadline of 5th October 2022, and may have to pay a penalty.

To recap, the Self Assessment deadlines are the following:

  • 5th October 2022 – Self Assessment registration (if you haven’t registered before)
  • 31st October 2022 – Paper tax returns
  • 31st January 2023 – Online tax returns
  • 31st January 2023 – Payment for outstanding tax

What happens if the Self Assessment deadline is missed?

Missing the deadline for filing your Self Assessment Tax Return can result in a penalty. The penalty for missing the deadline is £100 but that’s not where the fines stop, and if you continue to avoid presenting your financial information to HMRC more can head your way.

Penalties for late Self Assessment are as follows:

  • Automatic £100 for late payment
  • 30 days late – 5% of the tax due
  • A daily penalty of £10 per day for up to 90 days late
  • 5% of the tax due or £300, whichever is greater, for being six months late
  • Further 5% of the tax due or £300, whichever is greater, for being 12 months late

There are also penalties for not paying taxes on top of the late fees. They are:

  • 5% of the tax owed for not paying by 2nd March
  • A further 5% for not paying by 1st August
  • A further 5% for not paying by 1st Feb

Important dates for the 2022/23 tax year

If you have managed to file and pay your taxes already for the 2021/22 year then you can give yourself a nice pat on the back. But filing them on time one year doesn’t give you credit in the bank for being late with future submissions. Your Self Assessment Tax Returns must be completed every year until your situation changes and HMRC no longer needs you to complete one.

For the 2022/23 Self Assessment tax year mark the following deadlines in your calendar:

  • 5th October 2023 – Deadline for registering for Self Assessment if you haven’t registered before
  • 31st October 2023 – Paper tax returns
  • 31st January – Online tax returns and outstanding tax to be paid

However, remember that these are the deadlines and if you wish, you can file your taxes early. For the 2022/23 Self Assessment, the earliest possible date you can file your Tax Return is after 6th April 2023.

Being in charge of your finances takes plenty of organisational skills but with a little bit of time before the deadline, it’s not too late. There is still time to avoid a late filing and payment penalty by completing your Self Assessment Tax Return by 31st January 2023. 

Need a hand? 

If you’re struggling to manage your time effectively when it comes to Accounting responsibilities, it may be time to streamline your processes. 

Take a look at our electronic signatures for Accountancy and Tax guide for details on how you can save both time and money with eSignatures.

Author Bio

Dakota Murphey is a Brighton-based tech geek, writer, and mum to two young scamps. With the tiny little bit of time that’s left after tending to said scamps and geekery, our Dakota is a bit of a film buff and loves a box set, a fine-dining experience, and the odd glass or five of vino.