HMRC warns taxpayers of the threat of late filing penalties if self-assessment returns are not completed and returned by the end of the month

Most people will probably not need any more reminders about the looming deadline for the completion of your online self-assessment tax returns for the 2014-15 financial year. However, as accountants it would be remiss of us not to mention it none the less. Anyone who fails to submit their online tax return before 31 January, 2016, faces penalty charges.

HMRC has naturally encouraged taxpayers to file their returns in order to avoid late filing penalties, yet previous years’ experience shows that, in spite of the reminders, many taxpayers will still somehow contrive to miss the deadline. According to HM Revenues and Custom’s own figures last year, 890,000 missed the January deadline and were subsequently hit with instant £100 late filing penalties, as well as additional penalties for submitting severely late tax returns.

Moreover, HMRC estimates that with less than two weeks to go until deadline day, approximately a third of the 10.2 million UK residents required to complete a self-assessment tax return have yet to submit it. Naturally HMRC are concerned about this, and as a consequence Ruth Owen, HMRC’s director-general of personal tax, has urged taxpayers to act quickly before it’s too late:

“Our advice is don’t leave it until it’s too late. Make sure you give yourself plenty of time and remember our online service is available with helpful advice and handy tips any time of the year,” Ms Owen urged.

If your business is considering submitting a self-assessment tax return online this year, then you will need to act very quickly. You will not be able to submit your return online unless you have an ‘activation code’. Activation codes are sent in the post by HMRC and can often take up to 7 working days to arrive, so you will need to act immediately as time is of the essence.

What penalties are you likely to face if you’ve missed the deadline?

The penalty regime changed quite dramatically on 6th April 2011. Unfortunately the new penalty regime is considerably more costly than the old system was. Previously a tax return that was twelve months overdue would have only cost £200 in penalties: under the new regime penalties could reach £1,600 or more.

Late Filing Penalties

Length of Delay

1 day late

Automatic fixed penalty of £100. The penalty applies even if you have no tax to pay or have paid the tax you owe on time.

3 months late

£10 per day up to a maximum of £900. This is an additional penalty on top of the initial £100 fixed penalty

6 months late £300 or 5% of the tax due – whichever is higher. This is also an additional penalty on top of the initial £100 fixed penalty.

12 months late

£300 or 5% of the tax due – whichever is higher. This is also an additional penalty on top of the initial £100 fixed penalty. In more serious cases you may even be asked to pay up to 100 % of the tax due instead.

If you would like any further information about self-assessment tax returns and the late payment penalty system, then contact Steven Glicher accountants on 0161 405 8007 or email .

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