You’re probably thinking that an article like this is a little premature this side of Christmas, and I imagine it’s immediately dampened your spirits as we build towards the festive season. But the reality is, if you leave your tax self-assessment forms too late, you’re leaving yourself open to potential fines from the HMRC, as well as unnecessary hassle and anxiety for yourself.

As we build towards the new year and the self-assessment deadline, here are some helpful tips and important facts you need to know about the process.

Complete your tax self-assessment form online - there’s still time!

Those who are self-employed, or are earning money from rents or investments above a certain threshold, are required to fill out a self-assessment tax return.

If this applies to you, you would have been informed of the deadlines well in advance from HM Revenue and Customs (HMRC). Tax returns are typically sent out in April, at the end of the tax year to which they apply.

The deadline to submit your tax return by post was 31st October 2015. Fortunately, if you were too late meeting this deadline, you are still able to submit your tax return online before midnight on 31st January 2016.

Apart from the later deadline, the online process also boasts additional benefits, including on-screen help and automatic calculations as you work through the online form.

If you’re late in your submission, you will incur an automatic £100 late penalty. If you keep delaying, additional penalties can tot up to £1,600 which can prove costly for your business.

You can do the return yourself or leave it to the experts

How to complete the form

To complete an online tax return you are required to register to the HMRC’s online services. This involves requesting an “activation code” that is posted to you within a few days of your application. Planning in advance therefore not only helps you avoid penalties and personal stress, it also allows time for your activation code to be delivered.

While you wait for your activation code, it’s a good idea to remain productive by gathering all your financial documentation together, including bank statements, savings and details of income received during the current tax year.

When your code arrives, you need to activate it within 28 days. The account activation also requires the following details:

●     National Insurance Number

●     Postcode of registered address

●     10-digit unique taxpayer reference (UTR) number. This can be found on your tax return or notice letter from HMRC.

●     If you’re having trouble activating your account or signing in, you can call the HMRC online services helpdesk on 0300 200 3600.

Logging In and losing or forgetting your ID

You will be given a unique user ID to logon with. If you happen to lose this ID after registering, you can request a new one online with your UTR number and password.

Declaring new or existing income to HMRC

It is imperative to contact HMRC if you haven’t received a self-assessment return and you believe you should have. If your financial circumstances change, for example you become self-employed, you have three months after the calendar month in which you began your work to let the HMRC know.

Those registered for self-assessment pay 2 instalments of tax owed. These include:

1)    Outstanding tax owed for the year ending the previous 5th April

2)    First “payment on account” or advanced payment for the current tax year

Any penalties incurred from the previous year will carry over to the following tax year and these will need to be including in your tax return.

Filing your tax return late

If you are over 30 days late in paying, you will be charged 5% of the unpaid tax at that date. If you leave it more than six months without paying any tax you owe for 2015-2016, you will be required to pay a further 5% for outstanding tax at that date. To make things spiral even further, a penalty of 5% will be applied if you leave it longer than 12 months.

Additional interest will be charged for all outstanding amounts - including unpaid penalties - until full payment is received. It’s therefore beneficial to resolve any unpaid taxes immediately. Alternatively, file your tax return in good time before the deadline to ensure there’s no risk of late return fees.

Leaving your tax return for a longer period of time poses a risk of an investigation and assessment carried out by the HMRC. The HMRC will assess your income and calculate how much tax you owe. You have the ability to agree with the assessment or appeal it to the first-tier tribunal. Assessments are admittedly rare and will not usually happen to most people if you aim to file your tax return on time.

After investigation, the next step is prosecution. The HMRC statutory offence is 7 years but common law offences, including cheating the public revenue, can vary between 3-17 years.

There's still time to file your self-assessment, but the clock is ticking

Tax planning is entirely legal

Tax evasion, tax avoidance and tax planning are three terms that are often confused. Tax planning uses a variety of exercises to run the finances and affairs of a business by mitigating the tax burden, whereas tax avoidance or evasion is the act of deliberately defrauding the tax authorities.

While paying into an ISA or pension is encouraged, some methods of tax planning aren’t accepted by HMRC. If HMRC decides that your method of reducing your tax bill is unacceptable, it can demand you pay back the extra tax plus interest and penalties.

Examples of tax evasion are failing to submit a tax return, not declaring other sources of income or hiding taxable assets. Tax evasion is a serious crime and you could be sent to prison for up to 10 years.

Your tax return is your own responsibility

With everyone completing their tax returns around the same time, you shouldn’t rely on your accountant at the last minute. They will already be overwhelmed with other self-assessments and may well be at capacity. If they accept the work amongst your tight deadline, you’re also exposing them to risk of human error, which can potentially cause your further problems somewhere down the line.

It is your own responsibility to ensure that you have given yourself and your accountant enough time to gather the information required, filed your tax appropriately and reviewed the return in time for submission before the deadline.

January is already a difficult month for many of us as we deal with hardship of returning back to work. Limit your work life stress by planning your tax self-assessment in advance. Start now to avoid the January tax self-assessment blues.

Jonathan Wright is a partner at Richard Nelson LLP.