Harsh penalties for missing tax return deadline

It’s that time of year again, and we don’t mean Christmas. The paper tax return deadline has long passed, and the online deadline is looming (31 January). You can be forgiven for becoming caught up in the throes of planning for the festive season, but submitting your tax return late, can carry harsh penalties, even if by just one day.

If you miss the January 31st deadline to file your 2010-2011 return, HMRC will charge you £100. This applies even if you have no tax to pay or have paid the tax you owe.  If your return is 3 months late, you will be charged £10 for each following day – up to a 90 day maximum of £900. This is in addition to the £100 fixed penalty. For penalties thereafter, visit http://www.hmrc.gov.uk/sa/deadlines-penalties.htm (hopefully these won’t apply to you).

Don’t get caught out by submitting two returns!

If you have missed the October paper deadline, you still have time to register to file an online return.

If you submitted your paper return late (after 31 October), you may incur a fine of £100.  Submitting an online return as well does not cancel the penalty – beware!!

Tax bill deadline and penalties

Failing to pay your tax bill on time, also carries large penalties. The deadline for paying tax for the 2010-2011 tax year is 31 January 2012. Missing the deadline incurs charges. This is calculated based on interest from the date the payment was due. The interest caries, so check the HMRC website for more information.

Penalties for mistakes

Incorrect return penalties also exist, and have recently changed.  For tax returns for periods beginning after 1 April 2008, the penalty depends on how the HMRC views your carelessness.  The penalties are calculated based on the amount of tax you owe, and are payable in addition to the tax owed.

• No penalty to pay – reasonable care taken
• 0% - 30% - if you have been careless
• 20% - 70% - if you have deliberately underestimated your tax
• 30% - 100% - if you have deliberately underestimated your tax and attempted to conceal the fact

Help with your tax return

B20 are experienced in filing paper and online tax returns.  We encourage our clients to send us all of their tax information by 13th January in order to make the January deadline in plenty of time.  For further guidance and advice on all aspects of the UK tax system, get in touch with B20 Ltd.