Three-Month Penalty Looming for Self-Assessment Procrastinators
Last updated on September 25th, 2019 at 4:16 am
So it’s already well into April and as the sky turns from winter grey to pale blue Spring, all seems good. What is not so good is if you’ve still not filed your 2017/2018 self-assessment tax return. (From the optimism of Spring to taxation in less than a few words. Sorry about that!)
THIS ARTICLE IS RELEVANT TO EXAMINABLE TAX YEAR 2018/19.
Penalties for Missing the Deadline
Anyway, if you missed the 31st January deadline, then you may have already been stung with a £100 penalty; this is even if you don’t owe them anything, or you’ve actually paid the money on time.
Three months late (it’s looming) and more penalties start to kick in – from the 1st May – at £10 for each day your online return is late. (Late paper returns have started the £10 per day clock ticking already). Although the fine is capped up to a maximum of £900 (ie 90 days), it’s quite a bitter pill to swallow if you get caught with that plus the £100 you’ve already incurred.
More penalties follow after 6 months – 5% of the tax due or £300 (whichever is most) and after 12 months – another 5% or £300 charge (whichever is most).
Extra penalties also apply for paying late – 5% of the tax unpaid at 30 days, 6 months and 12 months.If you missed the 31st January deadline for self-assessment, then the consequences can be financially painful. Click To Tweet
These are the published penalties, but HMRC does appear to be taking a kinder stance recently if the individual has a ‘reasonable excuse’. HMRC are also looking at ways to reform the system so that first offenders are looked at more kindly, with bigger fines for those that persistently break their rules.
Examples HMRC give as ‘reasonable excuses’ include:
- a partner or other close relative dying shortly before the tax return or payment deadline
- an unexpected hospital stay
- a serious or life-threatening illness
- computer or software failure just before or whilst preparing an online return
- service issues with HMRC online
- fire, flood or theft
- postal delays that couldn’t have been predicted
- delays related to a disability
The return or payment must be sent as soon as possible after the ‘reasonable excuse’ is resolved.
Not ‘Reasonable Excuses’
What won’t count as a ‘reasonable excuse’ includes:
- reliance on someone else to send in a return who failed to do so
- a bounced cheque or payment failure because of insufficient funds
- the HMRC online system was too difficult to use
- no reminder from HMRC
- a mistake was made on the return
And definitely not these (although the funniest excuses revealed by HMRC):
- ‘I’m too short to reach the postbox’
- ‘My boiler broke down and my fingers were too cold to type’
According to HMRC, a total of 93.68% of self- assessment tax returns were completed by the midnight deadline on 31 January; so out of 11.5 million taxpayers, the majority did file on time, but still 700,000 missed the deadline – that’s still a lot of potential fines.
Grab the resources you need!
If you’re studying for your CII R03 exam, and you want to do all you can to prepare, grab our free taster to try out one of Brand Financial Training’s resources for yourself. Click the link to download the R03 calculation workbook taster now!