Chapter 1 - Introduction to Self Assessment

Question 1

Notification

Answer 1

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

Question 2

Notification - Penalties

Answer 2

If they don’t notify, they’ll get hit with a penalty and will be charged a % of lost revenue

Question 3

Deliberate and Concealed

Answer 3

Max penalty - 100%
Min pen with unprompted disclosure - 30%
Min penalty with prompted disclosure - 50%

Question 4

Deliberate but Not Concealed

Answer 4

Max Penalty - 70%
Min pen unprompted - 20%
Min pen prompted - 35%

Question 5

Any Other Case

Answer 5

Max penalty - 30%
Unprompted - <12m = 0%, >12m = 10%
Prompted - <12m = 10%, >12m = 20%

Question 6

Issue of a Tax Return

Answer 6

Issued by HMRC to taxpayers on 6 April immediately following the tax year. 2018/19 = 6 April 2019

Question 7

Filing Deadlines

Answer 7

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

Question 8

Penalties for Late Filing

Answer 8

£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

Question 9

Amendments to Returns

Answer 9

By HMRC:
- Can amended errors within 9 months of receiving
Taxpayer:
- Can amend return within 12 months of Jan 31 filing date

Question 10

HMRC Enquiries

Answer 10

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

Question 11

Record Keeping

Answer 11

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

Question 12

Appeals

Answer 12

Appeals against HMRC are made through the Tribunal system. In the Leg

Question 13

Incorrect Returns

Answer 13

Penalties apply

Question 14

Incorrect: Deliberate and Concealed

Answer 14

Max penalty - 100%
Min pen with unprompted disclosure - 30%
Min penalty with prompted disclosure - 50%

Question 15

Incorrect: Deliberate but Not Concealed

Answer 15

Max Penalty - 70%
Min pen unprompted - 20%
Min pen prompted - 35%

Question 16

Careless

Answer 16

Max - 30%
Unprompted - 0%
Prompted - 15%
Penalty can be suspended for 2 years

Question 17

Partnerships

Answer 17

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