Tax deadline warning - 31/01/22
ALL UK FREELANCES need to start preparing now to file their tax returns online by 31 January 2022. And if you want to file on paper - which Her Majesty's Revenue and Customs (HMRC) is making increasingly difficult - you need to do so by 31 October 2021 - which means demanding the forms now, if not earlier. The form is available to download here.
There are automatic three-figure fines for failing to submit your tax return by the deadline. So do get a move on. You can do so online via the HMRC website.
You should also get a move on if you want to claim reduced-rate NUJ subscriptions. In brief, no member need pay more than 1 per cent of their taxable income in subscriptions: but the Union's Membership Department needs evidence of your taxable income - that is, your tax return - well before 31 January if you are claiming this reduction.
If you have just started freelancing - precisely, if you did not file a "self-assessment tax return" last year - you need to register with HMRC now via the link below.
Making Tax Digital
HMRC has announced to that the probably-awful Making Tax Digital (MTD) initiative, which we thought we had seen off for the moment, is planned to become mandatory for all self-employed folk from 6 April 2024 - a year later than last announced.
The announcement and accompanying policy paper on the costs and benefits of MTD claim that it will make life easier for freelances and small businesses in general. But it looks set to require extra administration. We will have to submit tax returns quarterly instead once a year. It seems that we will have to run approved accounting software - using a free OpenOffice spreadsheet program may no longer be acceptable.
Currently, quarterly MTD returns are enforced for Value Added Tax returns, for those of us who are registered for VAT and have a turnover above the £85,000 threshhold - that is, those who have not registered voluntarily.
The Freelance will endeavour to keep members posted about these developments.