SJD Accountancy

Self assessment guides for the self employed

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By the end of January, there can be no doubt that the tax deadline is creeping up on those who need to file their tax return, but filing late isn’t the only concern for the contractors, freelancers and independent professionals who are registered for the self assessment process. The fines for failing to file or pay your tax bill on time are both well publicised, but those for completing your tax return incorrectly don’t seem to get as much press attention.

Those who have been penalised for filing their tax return incorrectly or with a mistake have received guidance on the system in order to help them identify why they might be penalised, how they can defend themselves if they are and whether they might have ground for appeal.

The Low Incomes Tax Reform Group have published the guidelines which are aimed at providing taxpayers with information about their rights as well as their responsibilities. They believe that those who are confident in their understanding of their rights can expect better outcomes if they have been the victim of a mistake on the part of HMRC, and also how they can make their case if they have been penalised as the result of a judgement call.

The guidelines include plenty of helpful tips on the best way to ensure that those who are penalised understand the system and are able to make their case effectively should they wish to challenge the department’s decisions.

The goal is to answer independent professionals’ questions, such as how HMRC classifies ‘carelessness’ on the part of tax payers when they complete their forms. The LITRG have pointed out that HMRC should not expect individuals with no specialist knowledge or expertise to be held to the high standards that they would apply to a large corporation. If HMRC have accused you of carelessness then it usually makes sense to give them a call to discuss how the error came about and how your personal circumstances could affect your tax return. You may need to lodge an official appeal if you believe that HMRC aren’t fully taking your circumstances into account.

For those who have been hit with a penalty, the chances of having it reduced are increased if you help them to rectify the mistake and provide access to any records they might need to correct it. If you realise that you have made a mistake before HMRC do, then they can reduce your penalty to zero. You can also request an internal review from the department if you lodge your appeal within 30 days from the date of HMRC’s decision.

If you would like to divest yourself of all the stress of dealing with HMRC and completing your own tax return, then using an accountant could make your finances a lot simpler. Our contractor calculator allows you to work out your take home pay and our guide to contractor company expenses is a useful resource to help you understand what you can and cannot claim. For more information on our services and to find out how we could help you, call us today on 01442 275789 or email:


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