Self-assessment tax returns are a way for individuals in the UK to report their income and pay the appropriate amount of tax to HMRC. These returns are typically due by the 31st of January each year for the previous tax year ...
The £10 penalties accrue daily, which can quickly add up and become a significant financial burden for taxpayers. This is why it is crucial to file tax returns on time or try to contact HMRC to discuss any exceptional circumstances that may have caused the delay.
However, if you have missed the deadline, don't panic just yet. There are still options available to help you avoid or reduce these penalties. Here are some of your options:
- Firstly, if you have a reasonable excuse for missing the deadline, you may be able to get the penalty waived. HMRC considers a reasonable excuse to be something that is out of your control, such as a serious illness or a family bereavement. In such cases, it is essential to contact HMRC as soon as possible and provide evidence to support your claim.
- Secondly, if you are struggling to complete your tax return, you can still make use of the self-assessment helpline. In March, HMRC reversed its decision to close the helpline between April and September in favour of online support services, following an outcry from customers. This helpline can provide you with guidance and support to help you complete your tax return accurately and on time.
If you are unable to pay the tax due by the deadline, it is vital to raise this issue with HMRC as soon as possible. By doing so, you may be able to make arrangements to pay the tax in instalments, making the payment more manageable.
It is always better to communicate with HMRC rather than ignoring the issue, as this can result in additional penalties and interest charges!
Speaking of interest charges, this brings us to another important aspect of late filing penalties. In addition to the penalties, HMRC also charges interest on the unpaid tax at a rate of 7.75%, the highest in over 20 years. This interest is charged daily, so the longer you delay filing your tax return and paying the tax due, the more interest you will have to pay.
Filing self-assessment tax returns on time is crucial to avoid penalties and interest charges. If you have missed the deadline, it is essential to contact HMRC and provide a valid reason for the delay.
Seeking professional tax advice can be beneficial in navigating the complexities of self-assessment tax returns.
If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.