HMRC rakes in £89 million in tax return penalties

HMRC has raked in £89 million in one fell swoop from UK tax payers who failed to file their 2013/14 tax return on midnight 31 January this year, it has emerged.

As many as 890,000 people faced an immediate £100 penalty for failing to file on time, including higher earners with savings, people with several sources of income, self-employed individuals, contractors, freelancers and landlords. 

They will also need to pay a flat £10 a day up to a 90 day maximum if their tax return is outstanding in 3 months’ time.  If they don’t file by July 31, the bill would stand at £900 plus 5% of the tax due or £300 penalty whichever is the greater for being 6 months late.  After 12 months, another 5% or £300 charge, whichever is greater.

These rules apply not just for those that owe tax to HMRC but also to those who do not owe but had to file a return.

Alan McCappin of Bradleys Accountants says, “The penalties will mount up quickly. Anyone who hasn’t filed yet, needs to do so urgently.”

If anyone has a genuine reason for failing to file, HMRC will accept a reasonable excuse. This includes

• a serious illness which leaves you incapable of filing a return
• death of a partner or close relative just around the deadline
• problems with HMRC’s online filing process
• loss of documents due to through theft, fire or flood

However, if you plan to offer any excuse you’d need to back it up with contemporaneous evidence like a doctor’s letter in case of an illness or a screenshot of the error message while trying to file through the HMRC portal.

We are still taking enquiries and will assist where we can.  Please email some details to contact@bradleysaccountants.co.uk or call Jean on 020 8303 1287.  You can also tweet your queries to @BradleysAcc twitter feed too.