Self-assessment is a process by which individuals and small businesses in the UK report their income and tax liability to HM Revenue and Customs (HMRC). It is the responsibility of individuals and businesses to ensure that their self-assessment is completed and submitted on time. Failure to do so can result in significant penalties from HMRC.
One of the most common penalties for not submitting a self-assessment is a fixed penalty of £100. This penalty is applied if the self-assessment is submitted late, even if there is no tax owed. The penalty is applied automatically, and it is not possible to appeal it. In addition to the fixed penalty, HMRC may also charge daily penalties of £10 per day for up to 90 days. This means that the total penalty for not submitting a self-assessment on time can reach £1,000.
If the self-assessment is submitted more than six months late, HMRC may charge a further penalty equal to the tax owed. This means that the total penalty could be much higher, depending on the amount of tax owed.
One way to avoid these penalties is to invest in a bookkeeper like Eden Bookkeeping Solutions. A bookkeeper, whether local or virtual, can help individuals and businesses ensure that their self-assessment is completed and submitted on time. They can also help to identify any potential errors or discrepancies in the self-assessment, which can help to avoid further penalties from HMRC.
In summary, it is important for individuals and small businesses in the UK to ensure that their self-assessment is completed and submitted on time to avoid significant penalties from HMRC. Investing in a bookkeeper can help to prevent these penalties and ensure that the self-assessment process is completed correctly.
