What Happens If You Dont Fill In Self Assessment
- Posted by:
- Admin
- Tags:
- Self Assessment deadline, Penalties for late tax return, Penalties for late tax payment, Reasonable excuse for late filing or payment, Tips to avoid future problems with tax returns
- Posted date:
- 05-06-2023
Have you asked: What Happens If You Don't Fill In Self Assessment? If you are required to file a Self Assessment tax return and fail to do so by the deadline, you may face penalties and interest charges from HM Revenue and Customs (HMRC).
Penny & Pounds are trusted self assessment accountants working in Redcar, Middlesbrough And North Yorkshire. We look at penalties for sending a late tax return and how to escape a Self Assessment fine.
PENALTIES FOR SENDING A LATE TAX RETURN
The penalty for a late tax return starts at £100, even if you have no tax to pay or have already paid the tax you owe. If your tax return is more than three months late, additional daily penalties of £10 per day may be charged, up to a maximum of £900.
After six months, a penalty of either £300 or 5% of the tax owed (whichever is higher) may be added, and after 12 months, a further penalty of £300 or 5% of the tax owed (whichever is higher) may be charged.
In addition to penalties, HMRC may charge interest on any tax owed but not paid by the deadline. This interest accrues from the due date for payment until the date the tax is paid in full.
Failing to file a Self Assessment tax return can also lead to further consequences such as HMRC launching an investigation into your tax affairs or taking legal action to recover the tax owed. Therefore, it is important to meet the deadlines and comply with your tax obligations.
PENALTIES FOR PAYING YOUR TAX LATE
In the UK, there are penalties for paying your tax late. If you don't pay your tax bill on time, you'll receive a penalty notice from HM Revenue and Customs (HMRC). The amount of the penalty depends on how late you are with your payment and how much you owe.
The penalties for paying your tax late are as follows:
1 day late
You'll be charged a penalty of 5% of the tax due.
30 days late
You'll be charged an additional penalty of 5% of the tax due.
6 months late
You'll be charged a further penalty of 5% of the tax due, or £300, whichever is greater.
12 months late
You'll be charged another penalty of 5% of the tax due, or £300, whichever is greater.
In addition to the above penalties, if you pay your tax late you'll also be charged interest on the outstanding amount. It's important to note that if you're struggling to pay your tax bill on time, you should contact HMRC as soon as possible to discuss your options. They may be able to offer you a payment plan to help you manage your payments.
CAN I ESCAPE A SELF ASSESSMENT FINE?
It is possible to appeal a Self Assessment fine in certain circumstances. HM Revenue and Customs (HMRC) may consider cancelling or reducing a fine if there is a valid reason for late filing or payment, such as a serious illness or a bereavement.
APPEALING A PENALTY
To appeal a fine, you must provide a reasonable excuse to HMRC within the specified time frame. The excuse must be a genuine reason that prevented you from filing or paying on time, and it must be something that was out of your control.
HMRC will assess each case on an individual basis to determine whether a reasonable excuse exists.
If your appeal is successful, HMRC may cancel the penalty, reduce the amount of the penalty, or agree to a payment plan to help you pay the penalty over time.
However, if your appeal is not successful, you may still be required to pay the full amount of the penalty, as well as any interest and late payment charges that may have accrued.
WHAT MAY COUNT AS A REASONABLE EXCUSE
In the UK, HM Revenue and Customs (HMRC) may consider some circumstances as a reasonable excuse for paying your tax late. Examples of reasonable excuses include:
Serious illness or disability
If you or a close relative becomes seriously ill or disabled, and you are unable to complete your tax return or pay your tax on time, this may be considered a reasonable excuse.
Postal delays
If you sent your tax return or payment on time, but it was delayed in the post, this may be considered a reasonable excuse.
A family bereavement
If you experience the death of a close family member or friend, and this affects your ability to file your tax return or pay your tax on time, HMRC may consider this as a reasonable excuse.
A fire, flood, or theft
If your home or business is affected by an unforeseen event such as a fire, flood, or theft, and this affects your ability to file your tax return or pay your tax on time, HMRC may consider this as a reasonable excuse.
It's important to note that each case will be considered individually, and HMRC will require evidence to support your claim for a reasonable excuse.
If you believe you have a reasonable excuse for paying your tax late, you should contact HMRC as soon as possible to explain your situation.
WHAT WILL NOT COUNT AS A REASONABLE EXCUSE
According to HM Revenue and Customs (HMRC) in the UK, there are certain circumstances that do not qualify as a reasonable excuse for paying tax late. These include:
Ignorance of tax obligations - taxpayers are expected to be aware of their tax obligations and deadlines.
Difficulty in paying - financial difficulties, such as cash flow problems, will not be considered as a reasonable excuse. Taxpayers are expected to make every effort to pay their taxes on time, even if this means negotiating payment plans with HMRC.
Lack of funds - running out of money is not a reasonable excuse for late payment, as taxpayers are expected to budget for their tax liabilities.
Delays caused by a third party - if a third party, such as an accountant or tax adviser, fails to file or pay taxes on time, it is ultimately the taxpayer's responsibility to ensure that their tax affairs are in order.
Computer or software problems - technical issues or software failures are not considered as a reasonable excuse, as taxpayers are expected to have contingency plans in place.
In general, a reasonable excuse is considered to be an unforeseeable or uncontrollable event that prevents the taxpayer from meeting their tax obligations on time.
AVOIDING FUTURE PROBLEMS
Here are some tips to avoid future problems with tax returns:
Keep accurate records
Maintain accurate and up-to-date records of all your income and expenses throughout the year, and organize them properly so that you can easily access them when it's time to file your tax return.
Understand tax laws
Keep up to date with the latest tax laws and regulations to ensure that you're complying with all the requirements and taking advantage of any deductions or credits that may be available to you.
Don't procrastinate
Don't wait until the last minute to file your tax return or pay your taxes. Start early and set reminders for yourself to ensure that you don't miss any deadlines.
Use tax software
Consider using tax preparation software to help you file your tax return. These programs can make the process easier and less time-consuming, and can also help you identify any potential errors or issues before you file.
Seek professional help
If you're not confident in your ability to prepare your tax return accurately, consider seeking the help of a professional tax preparer or accountant. They can help you avoid errors and ensure that you're taking advantage of all the deductions and credits that you're entitled to.
Are you looking for self assessment accountants in Redcar, Middlesbrough and North Yorkshire? Penny & Pounds can help you organise your bookkeeping and accounts.