Reminder to register for self assessment tax returns by 5 October

HMRC is reminding anyone who is new to self assessment for the 2022 to 2023 tax year to register with HMRC by 5 October or face penalties

New self assessment taxpayers could be someone who has set up a side hustle to earn money in addition to their PAYE job; disposed of cryptoassets; become newly self-employed or a landlord renting out property for the first time.

Anyone who is self-employed is required to file a self assessment return, whether they are a sole trader or in partnership. This includes people who work in the gig economy or have a second income from trading on eBay and similar websites, earn money as influencers and from advertising on social media channels.

Likewise, anyone receiving income from renting out property through sites like Airbnb need to file a tax return if their earnings exceed £1,000.

Whatever the circumstances, if a taxpayer has any income that they have not already paid UK tax on, they need to register for self assessment.

Gains on cryptoasset sales are liable for capital gains tax and must be reported on annual returns.

It is also very important to note that the higher rate child benefit charge kicks in for all earners with income over £50,000.

After registering online for self assessment, people will be sent a Unique Taxpayer Reference, which they will need when completing their return.

The deadline for filing tax returns online and paying any tax owed for the 2022-23 tax year is 31 January 2024. HMRC said that last year, 96% of taxpayers filed their return online.

However, for those who still file on paper, the deadline for paper returns is 31 October 2023.

In March this year HMRC launched a letter campaign, writing to 135,000 taxpayers using paper return advising them that these would no longer be sent out automatically, regardless of their ability to complete tax filings online.

The letter stated: ‘Customers who can’t or choose not to go digital do not need to worry – while our paper form will no longer be available to download on gov.uk, it will be available to request from 6 April by calling us on 0300 2003 610.’

HMRC is slashing access to telephone helplines and directing taxpayers to the HMRC website for as many services as possible. As part of this digital drive, it seems to have converted most of its public-facing pages targeted at individuals into question format pages so it is no longer possible to scan information quickly to find out if you are need to take action and complete a self assessment. Instead taxpayers need to answer a series of questions to access basic information.

Taxpayers can use HMRC’s online checking tool to assess whether they need to complete a tax return. There is also a step-by-step guide to check what to do to file a first self assessment tax return.

Myrtle Lloyd, HMRC’s director general for customer services, said: ‘If you are new to self assessment and unsure how the process works – HMRC is here to help. We have a wealth of resources and guidance available on gov.uk to help customers register, sign up to the online services and complete their tax return. We want to help customers get their tax right first time, just search ‘self assessment’ on gov.uk to find out more.’

HMRC said that ‘filing online means customers do not have to complete it all at once, they can save their progress and finish it later and have that added reassurance that HMRC has received their form when they press submit’.

HMRC has a number of video tutorials on YouTube for the employed and self-employed, as well as help and support guidance on gov.uk.

Taxpayers who think they no longer need to complete a self assessment tax return for 2022-23 tax year should tell HMRC before the deadline on 31 January 2024 to avoid any penalties or needing to complete a tax return.

It is also important to note that the self assessment form is being changed next year to treat crypto transactions, which are liable for capital gains tax, as a separate item to be reported in a separate box on tax returns. All crypto sales will need to be separately identified on UK tax returns from April 2024.

HMRC also warned taxpayers to be aware of the risk of falling victim to scams and never to share their HMRC login details with anyone, including a tax agent, if they have one. HMRC scams advice is available on gov.uk.

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