Filing your self assessment tax return late – what’s the worst HMRC can do?

Self assessment tax returns

You need to complete a tax return if any of the following conditions apply:

• You’re self employed, a partner in a business or a director of a limited company
• You’re an employee or a pensioner with an income of £100,000 or more
• You have pre-tax investment income of £10,000 or more
• You’re a ‘name’ at the Lloyd’s of London insurance market
• You’re a minister of religion
• You’re a trustee or representative of someone who has died

Reasonable excuses for filing late

You can appeal a penalty if you have a reasonable excuse for filing your tax return or paying your tax bill late.

Per HMRC’s website, a reasonable excuse is classed as “something unexpected or outside your control that stopped you meeting a tax obligation”. Examples of this are:

• The death of a partner or close family member
• An unexpected stay in hospital which prevented you from filing your tax return or paying your tax bill
• A serious of life threatening illness
• A failure with your computer or software while you were dealing with your tax affairs
• Services issues with HMRC’s online fling service
• A fire, flood or theft which prevented you from completing and submitting your tax return
• Postal delays which could not have been predicted

What will not count as a reasonable excuse?

HMRC states the following will not count as a reasonable excuse:

• You relied on someone else to send in your tax return and they failed to do so
• You sent a cheque and it bounced because of insufficient funds in your account
• You were unable to use the HMRC’s online filing system
• You did not receive a reminder from HMRC
• You made a mistake on your return

Penalties, interest and fines

If you miss the 31 January deadline for either filing your tax return or paying your self assessment bill, the longer you leave things, the more you will end up paying.

The following penalties will apply for late submission of your tax return:

• One day late – you’ll automatically receive a £100 fine. This applies even if you have no tax to pay or have paid the tax you owe
• Three months late – daily penalties of £10 per day for each day late up to a maximum of £900. This is in addition to the £100 automatic penalty above, so the overall fine could be £1,000
• Six months late – a fine of either £300 or 5% of the tax due, whichever is the higher. This will apply on top of the penalties above
• Twelve months late – a further £300 fine or 5% of the tax due, whichever is the higher, will be added to your bill on top of the penalties above.

In serious cases, if you’re more than 12 months late with your tax return, you may be asked to pay up to 100% of the tax due as well as any tax you owe, doubling your payment

You’ll also be required to pay interest on your tax due as long as it remains unpaid at a rate of 3% per annum.

What happen’s if you are unable to pay your tax due?

If you cannot pay some or all of the tax due for 2015/16 by 31st January 207, contact HMRC’s Business Payment Support Service on 0300 200 3835 wothin 14 days of the deadline and arrange a payment schedule for what you owe.

Do you need help with your self assessment tax return?

If you are unsure about completing your self assessment tax return, or what you can claim, it is advisable you contact a professional to deal with things for you. In a lot of instances, what you pay to an accountant or adviser will be saved in tax.

For help with your self assessment tax return give Hello Accountancy a call on 01259 692100 or email lauren@helloaccountancy.co.uk