Missing the tax return deadline can cause an enormous amount of stress – the prospect of severe penalty fees is enough to make anyone wince. But just what happens when you haven’t quite made that deadline – and is there anything you can do about it?
Penalties for filing your tax return late can be quite harsh, and often catch taxpayers off-guard. Even if you don’t owe any tax at all, you will still be charged a fee if you’re obliged to complete a self-assessment – for example, if you have had to submit one in previous years for tax you owed then.
The first penalty imposed is £100, which is applied on the 1st of February, and further charges will be exacted the longer you wait. If, after three months, your tax return still hasn’t been submitted, you will be charged £10 a day over 90 days for a maximum of £900. After six months, a £300 fee is charged, or 5% of what you owe, whichever is higher. After twelve months, £300 or 5% of what is owed is again charged, again depending on which is higher. By that twelve month mark, you could owe £1600 or more in fees, a pretty substantial amount – so you’ll want to avoid that outcome if you can.
You should still send in your tax return as soon as possible. Not only will this help you to avoid paying any further fines – if you send it in right away, then you’ll only have to pay at most the initial £100 penalty – but it will make it easier to appeal your penalty.
To appeal your penalty you must submit your appeal within 30 days of receiving the penalty notice, have a reasonable excuse, and file your tax return as soon as that reasonable excuse is resolved. Although every case is individual and evaluated on its own basis, HMRC gives as examples of a reasonable excuse a bereavement, an unexpected stay in hospital, a serious illness, a computer or software malfunction, issues with the HMRC website, postal delays, and fire, flood or theft. Each of these must have actually impacted your ability to complete and submit your tax return to count as a reasonable excuse.
Missing the deadline can happen easily, even if you don’t have what HMRC deems a reasonable excuse. You may not have realised a tax return was required, or perhaps you were dealing with the day-to-day stresses of your business, and somehow your tax return fell by the wayside. You may even have considered fees a small price to pay to buy some precious time to focus on other things – but hiring an accountant now can stop these fees from mounting up into the thousands. Dua & Co. are experienced accountants in Watford, and we can quickly and efficiently complete even the most complex of tax returns, saving you untold fees and removing the stress of having the tax man breathing down your neck.
So, stressful as missing the tax return can be, it’s easily resolved – just give us a ring or drop us an email today to see how we can help.