Posted by Nick Day on 28 Apr 2016

Beware of UK Self Assessment Tax Return Penalties!

2014/15 Tax Returns

Severe HMRC tax return penalties start to apply shortly for those individuals that have not yet filed their 2014/15 Self Assessment Tax Returns.

If your 2014/15 Self Assessment Tax Return is more than three months late (i.e. not filed by 30 April 2016) you will be charged a further £10 penalty for each day it remains outstanding, up to a maximum of 90 days, so up to a maximum of £900. This is in addition to the automatic £100 late-filing penalty that will already apply.

Looking ahead, further penalties of at least £300 (or 5 per cent of the tax shown as due on the Tax Return, if this is more) will be levied for Returns that are six and twelve months late.

Tax for the 2014/15 year should normally have been paid by 31 January 2016 and there are also the following late payment penalties to consider if payment is not made on time:

Payment 30 days late – tax return penalties of 5% of the tax unpaid at that date.

Payment 6 months late – a further 5% of the tax unpaid at that date.

Payment 12 months late – a further 5% of the tax unpaid at that date.

Anyone who has not yet filed their 2014/15 Tax Return should act immediately and contact us on an urgent basis to discuss their options. It may be possible to file the necessary Return initially on an estimated basis to avoid certain penalties, or even have the Tax Return cancelled if you can argue that “Self Assessment” should not apply in your case.

We can help in every aspect of bringing your UK tax affairs up to date including negotiating the penalty position on your behalf directly with HMRC.

2015/16 Tax Returns

The 2015/16 UK tax year ended on 5 April 2016 and taxpayers need to consider completing and filing their Tax Returns for this year.

Tax Returns usually need to be filed with HM Revenue and Customs (HMRC) by 31 January following the end of the tax year if you file on-line (or by 31 October following the end of the tax year if you file a hard copy paper Tax Return).

Therefore, the 2015/16 Tax Return needs to be filed by 31 January 2017 if filed on-line or by 31 October 2016, if filed in hard copy paper format.

If you are late in registering to file a Self Assessment Tax Return, the deadline is extended and the Return needs to be filed within 3 months from the date it is issued.

Failure to Notify Tax Return Penalties

If you have a new source of income or a capital gain, etc. on which there is a tax liability, you are required to notify HMRC by 5 October following the end of the tax year in which the income/gain arose, so by 5 October 2016 for 2015/16 Tax Return filing purposes.

If you fail to do this, penalties can apply based on the tax due and the amount unpaid at the due date which is usually 31 January following the end of the tax year, so 31 January 2017 for 2015/16 Tax Return filing purposes.

The amount of the penalty charged will depend on your circumstances and how cooperative you are in terms of bringing your affairs up to date.

If you would like any advice regarding the above article or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or customerservice@taxinnovations.com