Self-assessment deadline looming – don't miss the 31 January deadline

If you need to file a tax return online and you haven't yet registered online to do so, act now to make sure you don't miss the 31 January deadline.

It's even more important not to leave things until the last minute if you think you might have a query – recent figures showed that HM Revenue & Customs (HMRC) contact centre telephone queue times had doubled between 2013 and 2014, with waiting times to tax inquiry lines increasing from four minutes 42 seconds to 11 minutes 51 seconds.

Plus the later you leave it, the busier the phone line gets. The HMRC website has also crashed under the pressure of last minute returns in previous years. On deadline day last year over 550,000 returns were filed.

You have until 11:59pm on 31 January to send a completed online self-assessment tax return for the 2013/14 tax year, which ended 5 April 2014, to HMRC.

If you miss the deadline you'll be fined £100. This applies even if you don't owe any tax or are due a refund.

You need to be registered to complete it online. This is separate to registering for self-assessment itself, which you should have done by 5 October.

If you haven't previously registered to complete returns online, be aware that it can take HMRC up to seven working days to send you an activation code, so do this now to avoid missing the deadline.

Not registering in time is not a valid excuse for missing the deadline.

Do I need to file a return?

If you've been sent a self-assessment form, or received notification you need to fill one in since April 2014, then yes, you do.

But, if you haven't received a form, there are still some special circumstances that mean you could need to file one.

If your tax is deducted by your employer, you usually don't need to submit a form unless you get additional income from a second job or freelance work, or have been caught up in the changes to child benefit.

Since 7 January 2013, all parents with incomes above £50,000 who receive child benefit payments have to pay a tax charge based on their income and how much of the benefit they received in the 2013/14 tax year.

If HMRC has asked you to complete a tax return but you don't think you need to, tell it as soon as possible. You'll have to pay a penalty if you simply don't send one in.

If you haven't received a notification, you should get in touch with HMRC if you fall into one of the following categories, as it's likely you'll need to file a return:

• You're self-employed

• You're a partner in a business partnership

• You're a company director

• Your annual income is £100,000 or more

• You have income from property

• You have income from savings or investments that has been taxed and was £10,000 or more before you paid tax on it

• You have income from savings or investments that hasn't been taxed and is £2,500 or more (bank account interest is usually taxed automatically)

• You need to claim expenses or reliefs

• You or your partner receive child benefit and your income is more than £50,000

• You get income from overseas

• You have income from trusts, settlements or estates

• You have capital gains tax to pay

• You've lived or worked abroad or don't live in the UK permanently

• You're a trustee

Can I file by paper?

The deadline for filing paper returns passed in October, so don't do it that way or you'll definitely be fined.

How do I file a return online?

To file online, you first need a login. If you've had one for previous years, this will still be valid.

To register for a login for the first time, visit the HMRC website. Ensure you allow enough time before the 31 January 2015 deadline, as it can take up to seven working days for HMRC to send you an activation code by post, which you'll need to activate your online account.

What must I pay in my return?

As well as any 2013/14 tax owing, most self-assessment payers must also pay the first half of what's called a 'payment on account' for the 2014/15 tax year.

This is half the total expected tax due for 2014/15, which is estimated based on what you earnt and paid in tax the previous year. So if you owe £2,000 for 2013/14, the first payment on account will be for £1,000, to be paid by 31 January 2015.

The next half (£1,000 in the example above) must be paid by 31 July, and come 31 January 2016, you'll settle the current year's tax bill, as you're doing now for 2013/14.

If you don't think you will earn as much money during 2014/15, you can ask for your payments on account to be reduced, but you will have to give a valid reason, such as an expected drop in profits or a change in circumstances.

You only have to make payments on account if your previous year's tax came to more than £1,000. But if an employer (if you have more than one job) has already deducted more than 80% of that figure, you won't owe a payment on account now.

HMRC will usually send you a Self-Assessment Statement that shows how much you owe, or you can check your tax bill online.

How can I pay?

If you want to pay your tax via a bank transfer, you can do so right up until the evening of 31 January 2015. HMRC now accepts money under the Faster Payments system, which allows cash to go through in two hours.

However, each bank has a limit on how much you can transfer under Faster Payments. The limits range from £5,000 to £100,000. See the Payments Council for each provider's limit.

There are other ways to pay, including by debit or credit card. If you opt to pay this way HMRC will accept your payment on the date you make it, not the date it reaches HMRC's account – including on weekends. Be aware that HMRC is trialling a beta service for its debit card payment service that you may be directed to use. If you opt to pay by credit card you'll be charged a 1.4% fee.

What expenses can I claim?

For the self-employed, you only pay tax on profits after legitimate expenses, so claim back all you're entitled to (see HMRC's allowable expenses).

The deadline to register for self-assessment was 5 October. What if I missed it?

If you didn't register for self-assessment by 5 October you should contact HMRC immediately and explain your reasons for not registering in time. It will then assess whether or not you need to file a tax return. It is unlikely it will charge a penalty if you contact it and your excuse is reasonable.

However, if you fail to notify HMRC then you could face a penalty of up to 100% of any tax you're due to pay.

Can I still get an activation code if I ask for one within seven working days of 31 January?

It can take up to seven working days for HMRC to send you an activation code by post, which you'll need to activate your online account.

If it gets within seven working days of 31 January and you've yet to apply for your activation code to file online, you should do it urgently.

You should also inform HMRC either online or by phone if you haven't yet got it, as if you have a genuine reason for not having been able to access your online account, HMRC may give you a few days extra (past the deadline of 31 January) to file your tax return. This is on a case-by-case basis and there is no guarantee that HMRC will extend your deadline.

Another option is to file your return using the Government's Verify service. This allows you to verify your identity without an activation code. Just click on the Verify link detailed, then choose 'sign up with the GOV.UK Verify trial'.

However be warned that the service is a trial and HMRC may withdraw its involvement with it before 31 January. During the set-up process you'll be guided through creating a free account with Experian or Digidentity, and you'll also need a mobile phone or landline, a UK passport and/or UK driving licence and access to your bank, credit card, loan and /or mortgage statements.

What if I'm late paying?

If you're late making your payment on account or tax bill you'll be charged 3% interest. This is on top of the minimum £100 fine for missing the deadline for filing your tax return.

I missed the 31 January deadline because my pet dog ate my tax return – will I still have to pay the £100 penalty?

Unsurprisingly, the answer is yes. The above is a real excuse one taxpayer used to appeal against a late filing penalty, according to HMRC. Other bizarre excuses include the person who "fell in with the wrong crowd" or a taxpayer who claimed Barack Obama was in charge of their finances.

However, if you have what HMRC considers to be a "reasonable excuse" for filing late, you can appeal against the penalty fine or the late payment interest.

Examples of a "reasonable excuse" include:

• Your partner died shortly before the tax return or payment deadline.

• You had an unexpected stay in hospital that prevented you from dealing with your tax affairs.

• Your computer or software failed just before or while you were preparing your online return.

• Service issues with HMRC online services.

• A fire prevented you from completing your tax return.

• A disability that may have prevented you from filing on time.

• Postal delays that you couldn't have predicted (although this only applies to applications made by post and the deadline for these closed on 31 October 2014).

If you wish to appeal, you should do so as soon as possible. See the HMRC website for how to do so. Bear in mind that appeals are considered on a case-by-case basis and there is no guarantee HMRC will cancel your penalty or late payment interest.

What if I can't afford to pay the tax?

If your bill is correct but you can't afford to pay it, contact HMRC as soon as possible as you may be able to avoid late payment penalties by coming to an arrangement to spread your payments over a period of time (see our Free Tax Code Calculator to ensure you're on the right tax code).

You will need to discuss your financial position openly with HMRC and bring any outstanding tax affairs up to date.

What if I'm owed tax back?

After filing, you may be due cash back. This could happen if you've only worked part of the year, or you owe less than the total payments on account you've made for 2013/14. See the refund forms for help claiming back.

How can I contact HMRC?

If you want to talk about your own tax affairs then you must contact HMRC by phone on 0300 200 3300. Expect long wait times, although HMRC says phone lines are less busy between 8:30am to 10:30am and 2pm to 4pm, Monday to Friday.

If you have a general query then you can contact HMRC by email, post or register for their new online chat service.