New contractors and freelancers have until this Friday to register for Self-Assessment.

Anyone submitting a Self-Assessment return for the first time – including self-employed sole traders and limited company directors – will need to register by 5 October. They will then be able to complete their tax return by 31 January 2019.

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The obligation to notify is relevant if, during the tax year, an individual:

  • Had employment income that is not taxed under PAYE.
  • Received dividend income and has further tax to pay on that income.
  • Made a capital gain.
  • Has any other untaxed income or is liable for tax at higher rates, including High Income Child Benefit Charge.

“January may seem a long time away, but if you’ve not done Self-Assessment before and you’re now required to, you need to register,” Angela MacDonald, director general of Customer Services at HMRC, said. “We know that some customers don’t always realise they need to do Self-Assessment, like those who earn more than £50,000 and receive Child Benefit, so please check if this applies to you. It’s really easy to do and doesn’t take long.”

What’s at stake?

HMRC advises anybody who is unsure whether they need to register to head to the website and check the criteria.

Where an individual fails to make such notification and they have unpaid tax as at 31st January following the end of the tax year, penalties will be due. Unless, of course, they have a reasonable excuse for the failure. Penalties include an initial £100, which applies even if there is no tax to pay or if the tax due is paid on time. After three months, they will face additional daily penalties of £10 per day, up to a maximum of £900. After six months, a further penalty of 5% of the tax due or £300, whichever is greater. And after 12 months, another 5% or £300 charge – again, whichever is greater.

How to register

If you have to send a tax return and did not send one last year, you need to register for Self-Assessment.

To do this, head to the website and fill in the online form. You will then receive a letter in the post with a 10-digit Unique Taxpayer Reference (UTR). At the same time, you will be enrolled for the Self-Assessment online service.

Within 10 working days (21 days if you’re abroad), you’ll receive an activation code. You’ll need this when you first log in to your online account. You can replace an activation code if you do not receive it or you lose it.

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