This week, HMRC will be sending out around 850,000 £100 late filing penalty notices. The deadline for the submission of tax returns for the 2011/12 UK tax year was January 31st 2013. If you receive one of these, do not ignore it. It could easily turn into £1,600.
Here's how - The penalties for the late filing of a 2011/12 tax return are:
- A fixed penalty of £100, due immediately after the filing date (irrespective of whether a taxpayer has no liability or is due a repayment
- If the failure continues for over three months, the penalty level escalates by a fixed charge of £10 per day up to a maximum of 90 days (up to a maximum of £900).
And there you have it, a £1,600 fine.
So, if you receive a £100 late filing penalty, what should you do? There are two ways that you may be able to get out of paying it: Some penalties might be waived on proof of a reasonable excuse, such as a family illness, however each case will be decided on its own merits. HMRC will not accept the following excuses: Tax return too difficult to complete This is not a reasonable excuse. If you have difficulties you should seek help from HMRC or a tax adviser at an early date.
Work pressure HMRC give plenty of notice of the due date to enable you to arrange matters to deal with the tax return on time. Lack of information HMRC would not normally agree this. If you cannot obtain certain details you should enter an estimate on your tax return, with an explanation of why the figure has been estimated. HMRC did not remind you They normally issue a reminder shortly before the first penalty becomes due. But even if you did not receive the reminder HMRC would not regard this as a reasonable excuse.
The deadline is clearly shown on the tax return or notice to complete a tax return. Lack of free software If you sent your tax return late because you didn’t realise the free HMRC Online Services do not cover all forms, they would not agree this as a reasonable excuse. Failure by agent or tax adviser HMRC would not normally agree this. It is your responsibility to have your tax return ready on time. By implication then, anything else is fair game!
For further guidance and a late filing penalty appeals form, see HMRC form SA355. HMRC also recognises that there will be some people who should not be in self-assessment in the first place, for example if you used to be self-employed but it ceased before 2011/12. If they are contacted with an explanation as to the circumstances, they will be happy to remove the taxpayer from the self-assessment system and cancel their penalty, where appropriate. If neither of these get outs apply to you then you will probably just have to suck up the £100 late filing penalty. But file your tax return before the fine gets any bigger! If you have an outstanding 2011/12 UK tax return, please contact us straight away so we can advise you on the best way of regularising your UK tax position.