Self assessment 2006 - filing deadline 31st January 2007!
January 2007
31 January 2007 is the deadline for filing your tax return for the year ending 5 April 2006.
Returns filed after the 31 January will incur an automatic fine of £100. This £100 fine applies to each tax return. So a partnership with 3 partners, where the partnership and personal returns are late, will incur penalties of £600 - £100 for each partner's own return plus £100 for each partner for the partnership return. The penalties will be collected from the individual partners.
Those clients and contacts who are struggling to meet the deadline, but who would like to pay their tax on time, could consider the following strategy to avoid the £100 fine for personal returns.
For personal returns, the £100 fine is capped at the amount of tax owing. So if by the 31 January 2007 you have made a payment of any likely arrears of self assessment tax, which is sufficient to clear your actual liability for 2005-2006, then no fine will apply. This will also mitigate any surcharges.
Obviously the only way to be sure that you clear the actual liability is to complete your personal return and calculate any tax due. If you underestimate your payment the fine may still be payable, in part or in full. If you over estimate your payment, no harm done - you can apply to have the excess repaid or set against 2006-2007 liabilities.
If you want to take advantage of this opportunity you should ensure that your payment on account is made before the 31 January 2007.
The payment on account towards 2006-2007 tax does not attract a penalty if paid late, but interest will be charged.
Please note that the above comments do not apply to partnership tax returns. If a partnership return is filed late each partner will be fined £100, irrespective of the amount of tax owing.
Don't forget 31 January 2007 is also the date that you are required to pay both:
- the balance of any self assessment tax due for 2005-2006, and
- the first payment on account for 2006-2007.
