The 2021/22 tax year came to an end on 5 April 2022, therefore anybody who needs to file a self-assessment return for that year can do this as soon as this year has come to an end as it is not necessary to wait until nearer the filing deadlines. There can be advantages to submitting your tax return early.
HMRC revealed in a press release that almost 65,000 taxpayers filed their 2021/22 tax return on 6 April 2022.
How do I know if I need to file a tax return?
If you are required to file a self-assessment tax return, you will be sent a notice by HMRC. If you normally file a return and did so for 2021/22, you will have received a notice to file (on form SA316) once the tax year 2021/22 came to an end.
New source of income
If all your income is taxed at source under PAYE and you do not usually file a self-assessment return, if you had a new source of income in 2021/22 which you will need to pay tax, you will need to register for your self-assessment. This registration process will depend on why you need to register.
If you became self-employed in 2021/22 (even if you were also employed) and did not complete a tax return for 2020/21, you must register by 5 October after the end of the tax year in which the business was started. If the business started in 2021/22, you must register for self-employment by 5 October 2022. Along with registering for self-assessment, you will also register for class 2 National Insurance Contributions (NICs).
If you are not self-employed but you have a new source of income such as rental income or taxable dividend income, you will need to register by 5 October 2022 if this source rose first in 2021/22. This is also the case if you have a capital gain to report and again, the process depends on whether you have filed online in the past.
Once you have registered, HMRC will send you a letter reminding you to file your self-assessment tax return. By visiting the gov.uk website, you can find detailed guidance on registering for self-assessment. www.gov.uk/register-for-self-assessment.
The deadline for filing your self-assessment can depend on:
- Whether you file online or by a paper return
- Whether you want to have any underpayments collected through PAYE via an adjustment to your tax code
It is still possible to file a paper return however this must be filed earlier than an online return. The deadline normally for filing a paper tax return for 2021/22 is 31 October 2022, however if you have not been sent a notice to file by 31 July 2022, there will be a later deadline of three months from when the notice to file arrives.
As an example, if you received a notice to file dated on 10 September, you can file a paper return up until 10 December 2022 without incurring a late filing penalty.
The deadline for filing your 2021/22 tax return online is midnight on 31 January 2023. However, if the notice to file was received after 31 October 2022, the deadline would be extended to three months from the date the notice was received.
If you have a tax underpayment for 2021/22 and would rather pay this progressively under PAYE throughout 2023/24, you can do so if you file your return online by midnight on 30 December 2022 and elect for the underpayment to be coded out when doing so, as long as the underpayment is not more than £3000.
Filing early removes the risk of receiving the automatic late filling fee of £100.
Why file early?
HMRC encourages taxpayers to submit their tax return early not only to manage their work load more effectively but also because of the benefits to tax payers. The benefits are as followed:
- You will not get a penalty for missing the filing deadline
- If you are likely to struggle with paying your tax bill, there is more time to set up a payment plan
- It gets it out of the way and relieves stress
- You can file the return at a convenient time for you
- You can take your time without the pressure of a deadline
- You are able to set budgets as you know how much you owe
- If you are owed a refund, you will receive this money sooner
PS: Your accountant will thank you if you get your information to them earlier as they will have reduced pressure around the 31 January filing deadline
You need to have the necessary information before you can file your tax return for 2021/22 as this may dictate when you are able to file the return. Provisional figures must only be used as a last resort.
If your job is taxed under PAYE, you will need your P60 for 2021/22 to complete the employment pages. You should have received this by 31 May 2022. You will also need your P11D, which you should have received by 6 July 2022, if you received taxable expenses and benefits or details of payrolled benefits which should have been notified to you by 1 June 2022. You should ask your employer for this information if you have not already received it. If you left your job in 2021/22 and did not start a new one before 5 April 2022, you can find this information on your P45.
If you are self-employed, you must prepare your accountants, of have an accountant prepare them for you before you can complete the self-assessment pages. If you received any Covid-19 support in 2021/22, for example a grant under the SEISS scheme, you must include the details of this on your return as the grant is taxable.
In order to calculate your taxable rental profit, you will need to have details of your rental income and deductible expenses to hand. You may need statements from letting agents as well as your own records to do this.
If you have taxable investment income, such as interest and dividends, you must work out the totals for the 2021/22 tax year from statements and dividend vouchers. If you have made a payment on account of a residential property gain, you can finalise the liability on your tax return. If you realised capital gains in the tax year, you would need the information to calculate gains/losses. This may prompt a refund if you have generated a capital loss in the year after the date on which the property was sold.
Don’t worry, if you make a mistake then you have 12 months from the normal filing date ( 31 January 2024 for a 2021/22 online return) to file an amended return.
Paying the tax
Payments on account for 2021/22 must be made on 31 January 2022 and 31 July 2022, with any remaining tax paid by midnight on 31 January 2023 unless coded out.
If you are likely to struggle with paying your bill, set up a payment plan and do this sooner rather than later.
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