Warning: Filing a paper self-assessment tax return? You must act NOW to avoid a £100 fine

In 2020, HM Revenue & Customs (HMRC) announced it would no longer automatically send out paper tax returns in a bid to encourage people to use its online service instead. If you file online you have until 31 January 2023 to sort your accounts for the 2021/22 tax year.

However, if you have chosen to opt for a paper tax return, you'll need to send an SA100 form and ensure it is received before 31 October. This means you'll need to post it before this date – though if you're worried you'll miss this deadline you can still avoid a fine by submitting your tax return online.

Self-employed workers and high earners need to file self-assessment tax returns

Most UK taxpayers have their taxes deducted automatically from their wages, pensions or savings, and won't need to file a tax return. But tax returns are due from individuals or businesses who haven't had tax automatically deducted, or who have earned extra untaxed income.

You'll need to submit a tax return if any of the following applied to you in the 2021/22 tax year:

• You were self-employed and your income was more than £1,000.

• Your income was more than £50,000, and you or your partner claimed child benefit.

• You earned more than £2,500 from renting out property, or from other untaxed income, such as tips or commission.

• You earned more than £100,000 in taxable income.

• You earned £10,000 or more before tax from savings, investments, shares or dividends.

• You earned income from abroad, or lived abroad and had a UK income.

• You need to pay capital gains tax.

• You received income from a trust.

• Your state pension was more than your personal allowance and was your only source of income (unless you started getting your pension on or after 6 April 2016).

• HMRC has told you that you didn't pay enough tax last year (and you haven't already paid up through your tax code or voluntary payments).

• You filed a self-assessment tax return last year (even if you didn't owe any tax). You'll need to do this unless HMRC has already written to you to say you don't need to file one.

• You may also need to file a tax return if you're self-employed and you received a Covid-19 support payment, such as the Self-Employment Income Support Scheme (SEISS). For more information on reporting Covid-19 support payments, head to the Government website here. 

You can also file your tax return online

The deadline to register for a self-assessment tax return was technically 5 October 2022 – but generally you'll be OK if you register now. It's crucial you register as soon as possible though, as it can take up to 10 working days for you to receive your reference number.

If this is your first time filing a return, you can register by visiting the HMRC website.

HMRC will then set up your self-assessment online account and send you a letter with your unique taxpayer reference – a 10-digit code which you'll need the first time you log in.

If it's your first time filing online but you already have a reference number – for example, because you've previously filed a paper return – you should be able to skip this step and just register for the online service.

The online deadline to file your return is 31 January 2023. 

It's not just your return you need to file - you also need to pay your tax bill

It's not just tax returns that need to be filed by 31 October 2022 or 31 January 2023. The deadline for paying any tax you owe for the previous tax year (known as a balancing payment) and your first payment on account will also be due by these dates depending on whether you file by post or online. Miss these payments and you'll be fined and charged interest. 

You can pay your tax bill by bank transfer, debit card or cheque. You can also pay at your bank or building society if you have a paying-in slip from HMRC.

HMRC 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 each provider's limit. You can no longer pay the bill using a personal credit card or at the post office.

Speak to HMRC urgently if you can't afford to pay the tax

If your bill is correct but you find you can't afford 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 below for more on this. (Also see our Free Tax Code Calculator to ensure you're on the right tax code.)

You'll need a reasonable excuse for not paying your tax on time. This is usually something unexpected or outside of your control that stopped you meeting a tax obligation. For example:

• Your partner or another close relative 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.

• You had a serious or life-threatening illness.

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

• Issues with HMRC's online services.

• A fire, flood or theft prevented you from completing your tax return.

You can be fined if you miss the deadline for returning AND paying your tax bill

You'll be charged a £100 penalty if you fail to submit your return by the deadline – even if there's no tax to pay.

Further penalties of £10 a day are applied after three months, up to a maximum of £900. After six months, you'll get a further penalty of 5% of the tax owed or £300 (whichever is greater), which is repeated at 12 months.

There are also extra penalties for paying the tax late – these will be charged at 5% of the unpaid tax after 30 days, six months and 12 months. Plus, interest at 2.6% is applied to unpaid taxes straight away. 

The Government provides an online tool for calculating how much you'll need to pay in penalties and interest if you miss the deadlines.

Contact HMRC for further advice

The Government provides help sheets and videos for guidance on submitting your tax return.

You can also contact HMRC for advice directly by calling the helpline on 0300 200 3310. It's open from 8am to 6pm on weekdays and is closed on weekends. You can also get general help from HMRC customer support on Twitter.