Well you might think that the deadline has come and gone and nothing will happen but this is not the case.
All of those people who should and haven’t filed a tax return will face an automatic fine of £100.
Further fines, penalties and interest will occur for those that fail to complete their return after three, six and 12 months.
This is unless you contact HMRC with a reasonable excuse, along the lines deemed to be acceptable by them and posted on their website. Such an approach though is only likely to lead to an extension of time to complete your return at best.
What should you do?
The best approach is to ensure you complete and file your return without delay, with a full explanation in the ‘white space’ as to why it is late.
To avoid further interest accruing and a 5% surcharge on any tax payable you will need to ensure that any tax due is paid before the March 2, 2017.
However, you will still get a £100 fine for late filing and a small interest charge on payments which should have been made by January 31, 2017.
If after completing your return, and perhaps one of the reasons why you didn’t do it on time, you can’t pay the tax due then you may be able to agree with HMRC a ‘time to pay’ plan.
What if you continue to do nothing?
Not only will you incur the fixed penalty for not filing a return, those that file after three months from the January 31 deadline will be subject to a daily penalty of £10, up to a maximum of £900.
If you are six months late with your return and payment, you then face a financial penalty of £300 or 5% of the overall tax.
If you are more than 12 months late you face a further fine of £300 or a further 5% charge of the overall tax liability.
No “capping” applies to these penalties. Interest will also be added for late payment.
HMRC may increase the penalty for a return that is more than 12 months late if it is considered that the taxpayer has withheld information.
The penalty can be up to 200% of the tax if offshore evasion is proved and can be up to 100% if there are no offshore tax issues.
What else might I face for not filing my return?
The failure to file a return, whether you knew you should have filed one or not, could trigger a tax investigation.
HMRC have task forces that are looking at individuals’ tax affairs. Whilst these are often on a sectorial basis, for example they have had a recent purge of buy to let, they don’t exclude individuals as a whole. The likelihood of HMRC catching up with you is very real.
Certainly, if you didn’t realise that you needed to complete a self-assessment tax return, perhaps because you are in receipt of additional or alternative income, or for example your income has increased so you are no longer entitled to child benefit, then making a voluntary disclosure to HMRC is always viewed more favourably in terms of any penalties levied.
Where can I turn for help?
If you have an accountant or tax adviser then seek their advice. You may find that paying for this may be cheaper than any fines you could face and at least it will hopefully feel better value for money.