HMRC Set to Impose £100 Fines on Self-Employed Individuals

HMRC has issued a final warning to those who are self-employed regarding an approaching deadline that could result in a £100 penalty. With just days left until the October 5 deadline, anyone required to file a self-assessment tax return must register with HMRC by that date.

After the registration, self-employed people will have until January 31 to file their return and settle any outstanding tax. Those who are opting for a paper submission must file it by October 31, although the payment deadline remains January 31. Missing these deadlines could lead to an automatic £100 fine from HMRC. The CEO of Qdos, Seb Maley, commented on this stating how HMRC has been issuing reminders about this deadline for months, despite this, however, many may not have noticed as it has quickly approached.

Maley also stressed the importance of meeting the October 5 deadline for self-employed workers stating how registering early allows people to get a head start on preparing for their tax payments well before the January 31 cutoff.

Who Needs to File a Self-Assessment Tax Return?

You are required to submit a tax return if, in the previous tax year, your self-employment income exceeded £1,000, you earned more than £2,500 from renting property, you received more than £2,500 in untaxed income, or if you received a P800 form from HMRC indicating you underpaid tax last year.

A Self-Assessment tax return is also necessary if you need to prove your self-employed status, for example, when applying for Tax-Free Childcare, or if you plan to make voluntary Class 2 National Insurance contributions to qualify for certain benefits. Once you have registered, you can submit your completed tax return to HMRC.

How to Register for Self-Assessment

For the recent development, registrations for those who are self-employed can be done online. You would set up a business tax account, different from your personal tax account, through HMRC's online portal as a sole trader. You will also need your government gateway login details to proceed with further steps.

Once you have set up your business tax account, you will then need to register for self-assessment, adding the option to "Add a tax to your account" for online access.

Conclusion

In conclusion, self-employed individuals must take immediate action to avoid incurring a £100 fine from HMRC by ensuring they register for self-assessment before the deadline.