Tuesday, January 23 2018
January is here once again and for accountants everywhere, tax return season is in full swing. The new year tends to bring with it a host of good intentions and, perhaps, a determination to change certain things.
It is also the time of year when HMRC wheel out their adverts on various types of media (although they seem to have given up on making Moira Stewart hide under the stairs nowadays!), telling us all to complete our self-assessment returns and pay the tax by the end of the month.
Depending on how organised you have been over the past few months, this can elicit feelings varying from smugness to blind panic.
HMRC have also released a list of the most outlandish excuses for not completing a return on time, something they now do on an annual basis. Past examples have included “I left my papers in my shed and a rat ate them” and “my tax return was on my yacht, which caught on fire”.
This year’s Oscar-level tall tales are as follows:
On a more serious note, what can the above taxpayers expect to receive in exchange for providing a little light entertainment?
Penalties for late filing
The immediate consequence of not filing your return electronically by 31 January is an automatic £100 fine, even if you have no tax to pay, or are due a refund.
After that, if it still is not filed after three months, HMRC will start issuing daily penalties, at £10 per day, for a maximum of 90 days, so total further penalties of £900. These apply regardless of the size of the tax liability.
That is not the end of the story. If your return is still not submitted, by now it is six months late, and HMRC will charge a further penalty of 5% of the tax due or £300.
Finally, if the return is still not submitted by the time it is 12 months late, a further penalty of 5% of the outstanding tax or £300 is charged.
For all the outlandish excuses noted above, it is actually possible to appeal against these penalties if you have what HMRC consider to be a “reasonable excuse”. There is no definitive list of these, but some of those which have been successful in the past include:
We are of course here to help whatever the situation, to give you piece of mind that your tax affairs are in hand, and remove the stress of dealing with HMRC.
Please get in touch with your usual Ryecroft Glenton contact on 0191 2811292 if you would like to discuss the above in further detail.