Missing a tax deadline can be costly and place you in a great deal of hot water. However, it can be all too easy to fall behind with your tax obligations when you don’t have the support of an expert team behind you.
Will I be penalised for being slightly late?
If you do miss the deadline for submitting a tax return, you will be fined in most circumstances. The only way to avoid such a penalty is to give what HMRC deem to be a ‘reasonable’ excuse.
People who are directly employed by companies don’t normally have to complete a tax return, with their tax and insurance being deducted before their pay reaches their account. However, if you are a contractor or freelancer, you will usually be responsible for filing a tax return yourself and ensuring the necessary payments are made to HMRC.
10 million people in the UK are expected to file self-assessment tax returns, and this number is likely to grow in future, with more and more people now registering as self-employed.
Who needs to file?
People who need to complete self-assessment tax returns include business partners, directors of limited companies, self-employed individuals, employees and pensioners with incomes of £100,00 or more and trustees and representatives of people who have died, to give just a few examples. The more you delay the filing of a tax return, the more you will pay. You will be charged interest from the day that the payment becomes due.
Can I avoid a penalty if I miss a deadline?
You may be able to avoid a penalty for late filing if your partner has recently died, you have been in hospital unexpectedly, have experienced computer failures, your tax authority has been experiencing service issues or if postal delays have occurred.
However, it’s worth remembering that HMRC take each case on its own individual merits, which means there is never any guarantee you can avoid a penalty.
What if I miss the paper deadline?
People that miss the paper deadline of the 31st October for returning a tax return to HMRC should file online rather than sending it late to avoid a penalty. Penalties cannot be avoided by simply sending a paper return late but before the online deadline of 31st January.
You will be fined £100 if you miss the deadline by just one day, even if there is no tax to pay. Once your tax return becomes three months late, you will be fined £10 per day for 90 days as well as the original £100 penalty. If the return is six months late, you will need to pay £300 or 5% of the overdue tax, whichever is the greatest – as well as the fines you have already incurred.
You will be handed another fine of £300 or 5% of the tax due after twelve months. Again, this is in addition to the previous fines. Your payment could double if your tax return is more than 12 months late.
Getting in touch
If you do need help with staying on top of your business obligations, talk to One Click Group today. You can reach us by calling 0345 557 1287, using the form on the website or by sending a message to firstname.lastname@example.org.
Along with over 13 years experience in the contractor payroll industry, and after spending most of his working life as a financial advisor in the regulated financial services industry, Mike has garnered an extensive network of contacts in the recruitment industry, many of whom trust both him and the One Click Group to handle their accounting. Mike has also been a member of various industry bodies throughout the years, such as the British Institute of Recruiters, in order to champion best practices across the contractor payroll industry.