HMRC deadline looms for newly self-employed

Anyone that became self-employed during the 2016-17 tax year must register with HMRC by Thursday 5 October or they could face fines.

HMRC advises self-employed workers to register for Self Assessment and Class 2 National Insurance as soon as they can after starting a business, even if they have completed tax returns before.

The penalties for failing to register in time can be up to 30% of tax owed - unless the tax is paid in full by the online tax return deadline of 31 January.

And for those planning to submit their tax returns in paper form, the Self Assessment deadline of 31 October is also fast approaching.

Many small business owners struggle to meet deadlines imposed by HMRC, according to Informi, the business advice website published by the Association of Accounting Technicians (AAT).

Its research has found that one in four small business owners say they have previously failed to submit their online tax returns on time; and 7% have missed the 31 January deadline on multiple occasions.

The average fine for small business owners who missed this deadline was £284.56, but for one in seven late returners (13%), the penalty exceeded £500.

Darren Nicholls, product manager for Informi, said: "For those who have never had to complete one before, submitting your tax return can be a timely process and it's better to get it done sooner rather than later, when your earnings and receipts are still close to hand.

"The first step - of registering for self-assessment - must be completed by October 5 if you were self-employed or earned additional income in the last tax year. This is a fairly simple step, with HMRC providing you with a Unique Tax Reference (UTR) number with which you will be able to complete the self-assessment process."

Earlier this year, HMRC reported that 840,000 people - around 7% of those required to file tax returns - failed to meet the deadline, netting the Government an immediate £84 million in fines on 1 February 2017, not including additional fines accruing from that date onwards.

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