Paying your January tax bill 

As a contractor or freelancer, you may have used the festive break to think about the next steps you will take to improve your business. We hope you also used the holiday to think about your self-assessment tax return as the deadline is looming.

The consequences of missing the tax return deadline

The deadline for submission is fast approaching, and time is quickly running out to get it completed. If you are late submitting your tax return and paying any tax due, you could be fined and will face paying penalties and surcharges.

These are explained in detail below:

If you miss the deadline you could be fined £100. The following fines will also be applied for further missed deadlines:

  • 3 months late – £10 a day fine. Up to a maximum of £900 (90 days) for every day its late
  • 6 months late – £300 fine or 5% of tax owing (whichever is greater)
  • 12 months late – a further £300 fine or 5% of tax owing (again whichever is greater)

You will face the following charges for late payment of tax:

  • 30 days late – 5% charge on tax owing on that day
  • 6 months late – 5% charge on tax owing on that day
  • 12 months late – 5% charge on tax owing on that day

Interest will be charged on the tax owing plus the amount added in charges at a rate of 3%.

As a contractor or freelancer, you have a responsibility to make sure your tax return is completed correctly. There is a system of penalties in place for tax returns filed that contain mistakes. The level of penalty depends on whether HMRC feel you have been careless or have deliberately tried to mislead them.

Tax Payment Options 

HMRC try to make paying your taxes as easy as possible for you. They offer several different payment options. These include:

Same or next day

  • online or telephone banking
  • by direct or credit card online
  • at the bank or building society

In order to make payment through your bank or building society, you will first need to get a paying-in slip from HMRC.

3 working days

  • BACS
  • direct debit (make sure you already have this set up with HMRC)
  • via cheque through the post

5 working days 

  • direct debit (make sure you already have this set up with HMRC)

Please note that if the deadline happens to be on a weekend or on a bank holiday, please make sure your payment reaches HMRC on the last working day before the deadline.

If you are struggling to complete your self-assessment tax return, we can help with last minute filing and we can also offer guidance on the different payment options. 

AJN Accountants are specialists in helping contractors, freelancers and small businesses to save tax and time.

Please contact us for more information:

T: 020 3866 8951

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