For most people, doing their Self Assessment Tax Return is something they dread. Some though may be blissfully unaware that they even need to do one.
Whatever the scenario, if you don’t complete one and you should or are late, then you are at risk of severe financial penalties.
The current penalties for late Self Assessment returns are:
- an automatic £100 fixed penalty if the return is filed late, which will apply even if there is no tax to pay, or if the tax due is paid on time
- after three months, additional daily penalties of £10 per day, up to a maximum of £900
- after six months, a further penalty of 5% of the tax due or £300, whichever is greater
- after 12 months, another 5% or £300 charge, whichever is greater
- the percentage element at 12 months could be up to 100% if, by failing to submit the return, the taxpayer is deliberately withholding information that would enable HMRC to assess their liability
There are also penalties for paying late which are 5% of the tax unpaid at 30 days, at six months, and at 12 months.
Interest will also be charged on top of these penalties. The tax return deadlines remain unchanged – October 31 for paper and January 31 for online returns. The deadline for paying any tax due also remains the same at January 31.
In addition to the financial penalties, late submission of a tax return is known to increase the chances of an enquiry from HMRC and may invalidate any insurance taken out to cover the costs of such an enquiry.
For those whose tax affairs are relatively simple and for those who are systematic with dealing with such matters, the threat of increased financial penalties relating to the filing etc of their self-assessment returns is probably less concerning.
For those amongst us whose tax affairs are more complicated and for those who are perhaps not the best in dealing with such matters, now must be the time to ensure you seek the advice of professional tax advisers. Certainly, their involvement can help to ensure deadlines are not missed and your affairs are dealt with in a professional manner.
Such an approach could help safeguard you from wider investigations and the threat of further penalties. Perhaps more than ever before tax advisors represent even better value for money when compared to the threat of fines and penalties levied by HMRC. Your tax adviser too, should be well placed to ensure through dealing with your affairs in a timely and efficient manner that your overall tax bill is kept to a minimum.