If you didn’t manage to file your Self-Assessment Tax Return on time, you’ll be pleased to know that all is not lost.
There is still an opportunity to put matters right, but you really can’t afford to delay. The 2010 HM Revenue & Customs (HMRC) penalty regime will result in higher penalties the longer you postpone filing your return.
Paper Self-Assessment Tax Returns have to be filed by the 31st October following the tax year, or the 31st January if filing online. If you missed either of these deadlines then you’re in good company: an estimated 850,000 taxpayers received an automatic £100 late filing penalty charge last year. 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.
What will you be charged for filing a Self-Assessment Tax Return late?
- An automatic fixed penalty charge of £100, irrespective of whether you have tax to pay or not, or if you’ve paid your outstanding tax on time.
- If you file your return 3 months late, you’ll incur a penalty of £10 per day, up to a maximum of £900, in addition to the fixed £100 penalty charge.
- If you file your return 6 months late, you’ll incur a penalty of £300 or 5% of the tax due, as well as the two previously mentioned penalties.
- If you file your return 3 months late, you’ll incur a penalty of £300 or 5% of the tax due, as well as the two previously mentioned penalties. In some instances you may be asked to pay 100% of the total tax due instead.
However, Steven Glicher accountants may be able to get your late filing penalty cancelled. There are two instances where late penalty fines can be revoked.
- If a return has been sent to you late (after 31st July following the tax year end), then the filing deadline for the tax return is either the normal due date or three months from the date of issue of the return, whichever is later. For example, if a 2011/12 return was issued on 15th November 2012, then the due date would be 15th February 2013; rather than 31st January 2013. It may be a rare occurrence, but it does happen occasionally, particularly in the first year of registration.
- A penalty fine can be revoked if you have a really good excuse. HMRC refers to this as a ‘Reasonable Excuse’. HMRC give specific examples of a Reasonable Excuse such as never having received the return from HMRC, loss of your tax records due to fire/ floor/ theft etc, submission problems either with the postal system or HMRC’s online service, serious illness, bereavement etc.
However, it’s worth bearing in mind that there are strict guidelines on what constitutes a reasonable excuse. You may feel your excuse is adequate, but justifications like work commitments, the complexity of your affairs, a lack of information, absence of HMRC reminders will not be accepted. HMRC will not even accept that long periods in hospital or convalescing are a reasonable excuse.
What’s more, you’ll also need evidence to support your claim, like prints of error messages, or proof of postage.
If you’d like any further information on self-assessment and late payment penalties, or are considering lodging an appeal, then please feel free to contact Steven Glicher accountants on 0161 405 8007.