Chapter 1 - Introduction to Self Assessment Flashcards
Notification
If someone becomes chargeable to IT or CGT for the first time, they must tell HMRC within 6 months of the end of the tax year they become chargeable AKA 5 October
Notification - Penalties
If they don’t notify, they’ll get hit with a penalty and will be charged a % of lost revenue
Deliberate and Concealed
Max penalty - 100%
Min pen with unprompted disclosure - 30%
Min penalty with prompted disclosure - 50%
Deliberate but Not Concealed
Max Penalty - 70%
Min pen unprompted - 20%
Min pen prompted - 35%
Any Other Case
Max penalty - 30%
Unprompted - <12m = 0%, >12m = 10%
Prompted - <12m = 10%, >12m = 20%
Issue of a Tax Return
Issued by HMRC to taxpayers on 6 April immediately following the tax year. 2018/19 = 6 April 2019
Filing Deadlines
Paper return, later of:
- 31 Oct following tax year
- 3 months after notice to file was issued
Online (normal date), later of:
- 31 Jan following tax year
- 3 months after notice to file was issued
Penalties for Late Filing
£100 penalty immediately
> 3 months late - daily £10 penalties for 90 days
> 6 months - 5% of liability or £300 if more
> 12 months - another 5% or £300 if more
Amendments to Returns
By HMRC:
- Can amended errors within 9 months of receiving
Taxpayer:
- Can amend return within 12 months of Jan 31 filing date
HMRC Enquiries
HMRC can make formal enquiries into any return. Most common target is self-employed. A formal notice is served. The notice has to be served by:
- 1st anniversary of actual submission; or
- If late filed, the quarter day (30 April, 31 July, Oct & Jan) following the 1st anniversary of actual filing date
HMRC can only enquire once
Record Keeping
Sole traders: 5 years from 31 Jan following tax year
Everyone else: 1 year from 31 Jan following tax year
Max penalty of £3,000 if you don’t
Appeals
Appeals against HMRC are made through the Tribunal system. In the Leg
Incorrect Returns
Penalties apply
Incorrect: Deliberate and Concealed
Max penalty - 100%
Min pen with unprompted disclosure - 30%
Min penalty with prompted disclosure - 50%
Incorrect: Deliberate but Not Concealed
Max Penalty - 70%
Min pen unprompted - 20%
Min pen prompted - 35%
Careless
Max - 30%
Unprompted - 0%
Prompted - 15%
Penalty can be suspended for 2 years
Partnerships
Must be registered with HRMC by the nominated partner. The partnership tax return must be filed within normal deadlines. Each partner does one. Amendment and enquiry rules apply. An enquiry into a partner return extends to each partner’s individual returns
