Filing tax returns is a responsibility that many people find daunting, and the fear of potential fines often looms over those who submit their returns past the return deadline.
In the UK, the process is fairly straightforward, but the consequences of filing a late tax return can raise questions.
This blog aims to shed light on whether you can receive fines for returning tax late in the UK and what steps you can take to navigate such situations. For more information, read on.
Understanding Tax Return Deadlines:
In the UK, the annual tax year runs from April 6th to April 5th of the following year. The deadline for filing a paper tax return is usually October 31st, while online submissions have an extended deadline of January 31st. Missing these deadlines may lead to consequences, but it’s crucial to understand the nature of these payment penalties.
Late Filing Penalties
The HM Revenue and Customs (HMRC) imposes penalties for late tax returns, and these penalties can accrue the longer the delay.
If you file your assessment tax return after the initial deadline, but before three months have passed, you’ll face an initial penalty of £100. This amount increases if you surpass the three-month mark.
Beyond the three-month threshold, you’ll receive an additional penalty of £10 per day, up to a maximum of £900.
After six months, the penalty increases even more; either £300 or 5% of the tax due, depending on which is greater. If your tax return is 12 months late, you may face an additional £300 fine or a 5% penalty again.
While these penalties might seem intimidating, there is room for appeal. HMRC may reconsider the penalties if you have a reasonable excuse for filing late. Valid reasons include serious illness, bereavement, or unexpected postal delays.
However, it’s crucial to note that forgetfulness, lack of awareness, or insufficient funds are generally not considered reasonable excuses. Therefore, it’s essential to stay informed about your responsibilities and deadlines.
Interest on Late Payments:
Apart from the late filing penalties, late payments also face interest. Failure to settle your tax bill by the due date could lead to HMRC charging interest on the outstanding amount. The interest rate is set by HMRC and can change periodically.
Avoiding Late Filing
The key to avoiding late filing penalties is to be organised and be aware of the deadlines. Setting reminders, either manually or using digital tools, can help ensure that you submit your tax return on time.
If you’re struggling to gather the necessary information or you’re facing unexpected challenges, reaching out to HMRC or seeking professional advice can be beneficial.
Making Use of Online Services
In today’s society, online tax filing has become the norm, and HMRC encourages individuals to use their online services. Not only does this method provide a more extended filing deadline, but it also offers a quicker and more efficient process.
Online platforms guide you through the necessary steps, reducing the chances of errors occurring and ensuring your return is submitted accurately and on time.
Seeking Professional Assistance
For those who find tax matters overwhelming, seeking professional assistance is a viable option. Accountants and tax advisors are experienced in the complexities of the UK tax system.
They can provide guidance, help you gather the necessary documents, and ensure that your tax return is filed correctly and promptly.
While their services may come with a cost, the peace of mind and potential savings in penalties could outweigh the expense.
Contact LJS Accounting to Stay on Top of Your Paperwork
Paying your tax returns on time is a crucial responsibility for individuals in the UK, and understanding the potential consequences of late submissions is equally important.
While fines and interest on late payments are indeed a reality, taking proactive steps, staying informed about deadlines, and seeking professional help when needed can mitigate the risks.
Remember, the goal is not just to avoid penalties but also to ensure that you fulfil your tax obligations accurately and efficiently. By staying organised and informed, you can navigate the process of tax filing in the UK with confidence.
Here at LJS Accounting Services, we provide a wide range of services, including VAT and bookkeeping. If you struggle with keeping on top of your VAT or paperwork, LJS Accounting Services can help.
We work by preparing and submitting your tax returns to the HMRC to ensure you don’t miss any deadlines. Additionally, we control your bookkeeping and record keeping in line with HMRC.
So, if you are new to the business world or have been established for a while but feel overwhelmed with the paperwork, you’ll be glad to know that we can help you.
For more information on the services we offer or to speak to a member of our team, don’t hesitate to contact us today. We look forward to hearing from you soon.
Keli Evans, Director at LJS Accounting Services, excels in taxation and statutory accounts. With a focus on strong client relationships, she leads a diverse portfolio, overseeing vital financial aspects like VAT, payroll, pensions, and taxation with a holistic and committed approach.