I’ve missed the self-assessment tax deadline; Can I avoid the penalty charge?

on February 7, 2018

Deadline for submitting your tax return and making any balancing payment in UK was the 31st January. You will be charged a penalty initially starting from £ 100.00 if you miss the deadline for self-assessment submissions. HMRC may waive the penalty if you can provide a ‘reasonable’ excuse

 Tax returns

Most UK taxpayers have tax deducted at source (via Pay As You Earn, or PAYE) and don’t have to fill in a tax return. UK operates a Self-assessed system of tax declaration, this means that you as a individual is responsible to ensure you need to declare and pay taxes. HMRC does not write to you indicating so unless you have been listed for a compliance check.

There are more than 10 million people need to complete a self-assessment tax return (SA100 or SA200), and submit this to their tax office.

You need to fill in a self-assessment tax return if:

  • you’re self-employed, a business partner, or director of a limited company
  • you’re an employee or pensioner with an annual income of £100,000 or more
  • you have a pre-tax investment income of £10,000 or more
  • you’re a ‘name’ at the Lloyd’s of London insurance market
  • you’re a minister of religion
  • you’re a trustee or representative of someone who has died
  • It’s also worth noting that you’re legally obligated to fill in a self-assessment tax form if you receive one.

Reasonable excuses for filing late

HMRC may waive the penalty for a late return if you can provide a ‘reasonable’ excuse.

On its website HMRC states that a reasonable excuse for missing the deadline is ‘normally something unexpected or outside your control that stopped you meeting a tax obligation’.

Examples include:

  • the recent death of a partner
  • an unexpected stay in hospital
  • computer failures
  • service issues with the tax authority’s online services
  • a fire which prevented the completion of a tax return or postal delays

However, please remember that each case is unique and will be considered on its own merits. These excuses only apply if the problem actually prevented you from filing your return on time. It’s always best to file your return in plenty of time.

Online and paper returns

If you miss the paper deadline for returning your form to HMRC, do not send it off late because you will be fined. If you have missed the paper deadline, you can complete your return online using the unique taxpayer reference (UTR) that HMRC will have given you. What you mustn’t do is submit a paper return late, even if it is before the online deadline. You also cannot submit a paper return late and also complete an online tax return, thinking it will cover you.

Tax penalties and fines

If you miss the 31 January deadline, the longer you delay, the more you’ll have to pay.

One day late  You’ll automatically receive a £100 fine. This applies even if you have no tax to pay or have paid the tax you owe

Three months late  A fine of £10 for each following day up to a 90 day maximum of £900. This is in addition to the fixed penalty above, so the overall fine could be £1,000

Six months late  A fine of either £300 or 5% of the tax due, whichever is the higher. This will apply on top of the penalties above

12 months late   Another £300 fine or 5% of the tax due, whichever is the higher, will be added to your bill on top of the penalties above.

In serious cases, if you’re more than 12 months late with your tax return, you may be asked to pay up to 100% of the tax due as well as any tax you owe, doubling your payment

If you have not submitted your return or worried if you need to give us a call for a free consultation. Our experienced team will be delighted to help you. Our service includes all registration and dealing with HMRC.

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