Remember, Remember the 5th of October!
Don’t Miss HMRC’s Little-Known 5 October Tax Deadline
Many taxpayers know that 31 January is the deadline for filing an online Self-Assessment tax return. Fewer people know about another important date: 5 October.
If you need to complete a Self-Assessment return but are not already registered, HMRC expects you to notify them by 5 October following the end of the tax year.
What is the 5 October Deadline?
The 5 October deadline is the date by which taxpayers must tell HMRC if they may need to complete a Self-Assessment tax return and pay additional Income Tax or Capital Gains Tax.
This often applies if you have:
- Self-employed income
- Rental property income
- Significant investment income
- Capital gains from selling assets
- Other untaxed income
Failing to notify HMRC on time can potentially lead to penalties.
Check Whether You Need to Register
HMRC provides guidance and an online tool to help determine whether you need to complete a Self-Assessment return.
In most cases, these resources are accurate. However, some situations are more complex and may not be fully covered by the online checker.
A Commonly Overlooked Example
One area that can cause confusion is the encashment of a UK investment or life insurance policy.
When a policy is cashed in, it may create a chargeable event gain, which is treated as savings income for tax purposes.
HMRC guidance states that if this gain, together with your other savings and investment income, exceeds £10,000, you may need to register for Self-Assessment.
However, many policyholders will have already paid tax through the policy, particularly basic-rate taxpayers. In some cases, no additional tax will actually be due.
Do You Always Need to File?
Not necessarily.
Tax legislation contains exceptions where income has already been taxed at source and no further tax liability exists.
This means some taxpayers who appear to meet HMRC’s Self-Assessment criteria may ultimately have no additional tax to pay.
The key point is that each case should be reviewed based on its individual circumstances.
What If HMRC Asks You to File?
If HMRC issues a notice requiring a tax return, you should not ignore it.
If you believe no tax is due, you can contact HMRC and ask for the notice to be withdrawn. If HMRC agrees, you will not need to submit a return.
If the notice remains in place, you must file the return by the usual deadline to avoid penalties.
Can You Appeal a Penalty?
Yes.
If you receive a penalty and believe it has been issued incorrectly, you have the right to appeal.
This can be particularly relevant where no tax was ultimately due or where there was a reasonable excuse for failing to notify HMRC.
Our Advice
The 5 October deadline is often overlooked, but it can be just as important as the more familiar 31 January filing deadline.
If you’ve received untaxed income, sold investments, encashed an insurance policy, or are unsure whether Self-Assessment applies to you, seeking professional advice early can help you avoid unnecessary penalties and ensure your tax affairs are handled correctly.
Need help with Self Assessment or HMRC correspondence? Contact FWCA’s tax team on [/ tel] for expert guidance before the deadline arrives.
For more information on our Self-Assessment services – CLICK HERE
Folkes Worton LLP Chartered Accountants
Accounting for the Future