Is everything lost if you miss the tax return deadline?

Is everything lost if you miss the tax return deadline?

Date26 Jan 2016
Posted ByAdmin

So you think you are not going to make the 31st January and are wondering what to do? Well to start with, don’t worry. If you think you are not going to make it, take the following steps:

Don’t worry

Yes - don’t worry. If you file a couple of days late you won’t get thrown into prison. However you will definitely earn yourself a £100 penalty. Plus, any interest if you have failed to pay your tax on time.

But don’t procrastinate any further. Remember the longer you take to file a tax return, the more fines you will incur. 

See a breakdown of penalties below:

  • An instant fine of £100 if you miss the January 31 deadline
  • A penalty of 5% of tax due if you fail to file within 30 days
  • If you don’t file by 30 April, you get a daily penalty of £10 per-day (for up to 90 days)
  • A £300 (or 5% of the tax you owe, whichever is greater) fine if you still haven’t filed after another 90 days
  • Another £300 (or 5% of the tax you owe, whichever is greater) if you haven’t filed within a year
  • More penalties - including up to 100% of the tax owed, if HMRC believed you are deliberately delaying

If HMRC fails to see your tax return within a year, you could be looking at a minimum fine of £1,600.

What counts as a reasonable excuse?

You may escape a fine if you have what HMRC calls a ‘reasonable excuse’. It usually has be something major; take for instance taxpayers in the north affected by floods that hit the UK in December 2015.  You can get in touch with HMRC and agree a new deadline. Some more examples include:

  • Recent death of a partner
  • Unexpected stay in a hospital
  • Life threatening illness
  • Computer or software failure while preparing
  • Service issues with HMRC’s online services
  • Fire, flood or theft
  • Postal delays not in your control

However, HMRC won’t accept the following as reasonable excuses:

  • Your cheque bounced or payment failed due to lack of funds
  • You found HMRC’s online system difficult to use.
  • You didn’t get a reminder from HMRC
  • You relied on someone else (like an accountant or a friend) to send your tax return and they didn’t.

File and pay as soon as you can
The longer you delay filing and paying your tax, the more interest and penalties you will have to cough up. And if you persistently delay you are more likely to attract unwelcome attention from HMRC inspectors who might suspect that your records are not up to the required standard.

Need some help?

If you are likely to miss the deadline and need some additional help, have a look at these resources:

-    Top tips for completing HMRC's self-assessment tax return online
-    Self-employed? 5 unusual tips to reduce your self-assessment tax return bill