Are you ready for the summer tax deadline?

The self-assessment deadline is nearly here. Are you ready?

Tax self-assessment deadline

The summer self-assessment tax deadline is almost upon us. In just two weeks, freelancers and gig economy workers will be hit by a huge bill, and if they don't pay up in time, they'll face interest charges - and possibly a fine. It means there's just two weeks to get organised.

See also: Designer jeans and betting slips among 'ludicrous' expense claims on tax returns

See also: Changes to digital tax plans welcomed

What is the summer deadline for?

The summer deadline is one of two faced each year by self-employed people. The one that people make the most noise about is the 31st January, when they have to submit their tax return, pay whatever is outstanding from the previous year, and pay the first half of that year's tax.

There's no form to submit in the summer, just the second half of that year's tax. This is due if your last self assessment bill was £1,000 or more - and if you haven't already paid more than 80% of the tax you owe.

It's not actually based on the amount of tax you owe - because HMRC has no way of knowing that. Instead, it's based on what you made last year. This is fine if you make roughly the same each year, but as any number of celebrities have discovered, can cause major problems if your income fluctuates - and you had a better year last year than you are doing this year.

Can you avoid paying?

If this is the case, you can just go into your online account and select 'reduce payments on account'. You'll need to give an estimate of what you expect to earn in this tax year, and your payment on account will be reduced. It's worth pointing out, however, that it's a terrible idea to do this just because you're a bit short of cash, because you will be left with a headache in January - and possibly a fine.

If you miss the deadline, interest will start building up on what you owe at 2.75% - and if you still haven't paid it by January you could face a fine. If you haven't paid by the first week in March, you'll have to pay a penalty of 5% of what you owe.

It's therefore essential to prioritise your tax payments. It feels particularly cruel that this comes at such an expensive time of year, when the summer holiday bills keep mounting, but if you ignore this deadline, there will be a serious price to pay for it later.

Great quotes about tax

Great quotes about tax