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HMRC has reminded self-employed workers, including those with side hustles, that there are less than 100 days until the self-assessment tax return is due.
By midnight on 31st January, those earning income via self-employment are required to file their tax returns and pay tax owed to HMRC or risk fines, which start at £100.
Taxpayers are issued a penalty if they need to send a tax return and miss this deadline. Late filing penalties start at £100 if your return is up to 3 months late, with charges increasing beyond this.
Late payments to HMRC receive interest of 7.75% – 3.5% higher than the interest paid by HMRC (4.25%) on money owed back to individuals who are due tax repayments.
Those who have earned more than £1,000 (above the minimum trading allowance after expenses have been claimed) via self-employment – whether freelancing or a side hustle – between 5th April 2022 to 6th April 2023, need to file a tax return.
Partners in a business partnership, those with a taxable income of more than £100,000 and individuals due to pay the High Income Child Benefit Charge are also required to do so.
Seb Maley, CEO of tax insurance provider, Qdos, commented on the approaching self-assessment deadline: “It’s that time of year again. If last year is anything to go by, around 12m people in the UK will be preparing to file tax returns with HMRC – from full-time freelancers and business owners to those with second incomes, such as side hustles.
“While HMRC will issue a £100 off the bat to those who miss the midnight deadline on 31st January, the rising interest rates slapped on top of late payments – currently 7.75% – can accumulate very quickly.
“Getting your tax return right is just as important as filing and paying it by the deadline. HMRC will have no hesitation in launching tax investigations if it spots a mistake.
“Given the number of tax enquiries jumped by as much as 20% in the past two years – to nearly 300,000 a year – compliance and protection are also essential.”
