SELF-ASSESSMENT: PENALTIES LOOM IF YOU KEEP THE TAX MAN WAITINGJan. 28, 2014, 11:10am
Don’t keep the tax man waiting! Avoid leaving your self-assessment tax return to the eleventh hour or even miss the January 31st deadline all together and incur unnecessary penalties.
According to HMRC more than 750,000 missed the self-assessment deadline in January 2013 resulting in millions in penalties and other charges.
The majority of returns filed are now completed online, 82.5% in fact in 2013, but astoundingly 578,000 left their return until the very last day and the busiest hour occurred between 4-5pm, with 46,000 returns made every 12 seconds.
So what is the morale of the story? Prepare, prepare, prepare and return early. There is really no need to take on unnecessary stress and financial risk by leaving your return to the last minute or even fail to meet the deadline at all.
Even if you don’t owe any tax failure to complete your return could mean you end up paying HMRC up to £1,600 in penalties. The cold hard facts are that if you miss the deadline the longer you delay the more you’ll have to pay –
§ One day: £100 penalty even if you don’t have any tax to pay;
§ After three months: £10 for each day that passes up to 90 days, £900 maximum. Plus the original fixed penalty;
§ After six months: £300 or 5% of the tax due, whichever is higher, in addition to the above penalties;
§ After 12 months: £300 or 5% of the tax due, whichever is higher, plus all of the above penalties.
The only way to avoid unnecessary penalties if you miss the deadline is to provide a ‘reasonable excuse’ to the tax man.
Excuses such as you found the online process to be too difficult, you forgot about the deadline, or even you only registered to file online on the final day, are not valid justifications for HMRC. However, valid justifications considered maybe a failure in the HMRC computer system or if your computer breaks down just before or during the process, if you have applied to file online and your activation code hasn’t arrived in time; or if a serious illness, disability or mental health condition has mad you incapable of filing your return.