What Happens When You Miss the Deadline for Filing Your Tax Return or Paying Your Taxes?
It is strongly advised that you adhere to the deadlines for filing your tax return and settling your tax liability promptly. Failing to do so not only raises the likelihood of coming under scrutiny by HMRC but also exposes you to potential penalties and accrued interest, as detailed below.
If you fail to file your tax return by the due date, typically on or before the 31st of January following the end of the tax year, you will incur an automatic non-refundable penalty of £100. However, if you have a valid and reasonable excuse, these penalties may be waived. It’s important to note that a reasonable excuse does not include factors like ignorance, negligence, or having someone else handle your accounts or file the return on your behalf without adhering to the deadline.
For returns that are over three months late, an additional penalty of £10 for each day beyond the deadline will be imposed, with a maximum penalty period of 90 days.
Should your tax return remain overdue for more than six months, you will face a further penalty of either £300 or 5% of the tax liability, whichever is higher. It’s worth noting that daily penalties do not apply to Capital Gains Tax (CGT) returns.
If your tax return is submitted more than twelve months after the filing deadline, which typically falls on the 31st of January, 22 months after the end of the tax year for self-assessment returns, an additional penalty of either £300 or 5% of the tax liability (whichever is greater) will be applied, in addition to the penalty due for the previous 31st of July. In severe cases, the penalty may even escalate to 100% of the outstanding tax.
Failing to make timely tax payments will result in interest being charged on any overdue amounts. Additionally, there’s a 5% surcharge if your liability for the previous tax year is not settled within 30 days after the 31st of January following that tax year. If payment remains outstanding beyond the 31st of July following that date, an additional 5% surcharge will be imposed. Furthermore, if the tax remains unpaid by the subsequent 31st of January, a third 5% surcharge will be levied.
What Can You Do If You Are Unable to Make Timely Payments?
If you find yourself unable to meet your tax obligations on time, consider reaching out to HMRC to discuss possible arrangements. Currently, there is a Business Payment Support Service Helpline that you can contact at 0300 200 3835 to explore options and seek assistance.
DISCLAIMER
© Thandi Nicholls Ltd 2024 All Rights Reserved – The above articles are provided for guidance only and may not cover your personal circumstances so you should not rely on them. It is important that you seek appropriate professional advice which takes into account your personal circumstances where you can provide the full facts of the case and all documents related to your case. Thandi Nicholls Ltd t/a uklandlordtax.co.uk, cannot be held responsible for the consequences of any action or the consequences of deciding not to act.