HMRC warning over £100 fines if you 'haven't kept receipts'

If you fail to register and pay your tax bill you could be pursued through the courts.

Business experts have revealed crucial tips for self-employed people to organise their finances ahead of this weekend’s deadline to register with HRMC for a self-assesment tax return on 5 October. If you fail to register and pay your tax bill you could be pursued through the courts.

If you register on time, the deadline for paying your tax bill is 31 January, otherwise you will have three months and one week to pay from the time you register. Missing the deadline to submit your tax return will result in a late-filing penalty of £100 initially.

If you still haven’t paid your tax return 3 months after the deadline, then you may be fined more. In February this year, HMRC reported that an estimated 1.1 million customers missed the deadline (31 January 2024). Kyle Eaton, money.co.uk business bank accounts expert, offers some key tips and good habits to get into to make your return easier.

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“Start maintaining detailed records of all your income and expenses. This includes invoices, receipts, bank statements, and other financial documents. The more organised your records are, the easier it will be to file your tax return," Kyle said, discussing the importance of keeping records and receipts.

“Be aware of what counts as taxable income. This could include earnings from freelance work, selling products or services, and any income generated from content creation on platforms like YouTube or blogging. Consider using accounting software or apps for freelancers and small businesses. These tools can help you track income and expenses; some can even estimate your tax liability.

“A good practice is to regularly set aside a portion of your income so you know when taxes are due. The exact amount will depend on your income level and tax bracket. If your tax bill is over a certain amount, HMRC may require you to make payments on account towards next year's tax bill. Understanding this system can help you budget accordingly.

“Finally, make it a habit to review your financial records regularly (e.g., monthly or quarterly). This ongoing review helps keep you organised and better explains your financial health throughout the year.”