Have You Done Your Accounts And Tax Returns?
Be organised and get your return in on time ...
POSTED BY JONATHAN VOWLES ON 17/12/2019 @ 8:00AM
It was the week before Christmas and all over the land, taxpayers were stirring and accountants were sweating. Christmas is not just the season of goodwill, it is also the season for getting your tax returns done ...
It you need some help or advice with your tax return, do get in touch!
copyright: imagestock / 123rf
Every year there are people who take the holiday break as a good time to get their tax return done. HMRC says that normally, around 2,600 people file on Christmas Day itself and Boxing Day is even more popular with around 8,500 returns filed then.
"But what if you don't get your tax return done on time?"
Around 11.5m people have to file a personal tax return in the UK and 93.68% filed their 2017/18 on time, meaning that around 750,000 people were late in filing. So, what happens when you are late? Well, the answer is that HMRC is going to penalise you by charging you two different sets of penalties. One set for being late with the tax return and a second set for being late with any payment.
The penalties for filing your tax return late are:
The first penalty is a £100 fine for being late with your tax return. If you are late by a month then your penalty charges aren't very large.
The second penalty is a £10 per day fine, which starts from 1st May each year. The £10 per day is only charged for 3 months. At which point your tax return is 6 months late and you will have racked up £1,000 in fines.
If you haven't filed your tax return by 1st August then you get a £300 late penalty (or 5% of the tax owing whichever is greater) which makes your total late penalty at this point now £1,300.
If you still haven't filed your tax return at the 12-months point then you get another £300 penalty (or 5% of the tax owing whichever is greater). Your total late penalty is now £1,600 without taking account of the amount of tax you owe which can make the penalty even bigger!
The late payment penalties are:
The basic penalty is an interest charge of 3.25%pa. But there are also penalty interest charges.
If you are late by 1 month and haven't paid your tax by 1st March then you get penalty interest of 5% of whatever tax is owed on that day.
If you are late by 6 months and haven't paid your tax by 1st August then you get another penalty interest of 5% of the tax owing on that day.
... and the moral of this is to be organised and get your return in on time!
But if you can't then firstly, make a payment on account of your tax so that you don't get the late payment penalties or they are at least reduced as much as possible. Secondly, if you have a reasonable excuse for being late then you may be able to get the taxman to remove or reduce the penalties.
Until next time ...
Would you like to know more?
If you'd like some help or advice with your tax return, do call me on 01234 752 566, leave a comment below or click here to ping over an email and let's see how I can help you.
About Jonathan Vowles ...
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas, which can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.
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