Almost one million people missed the 31st January self assessment tax deadline this year. If you’re one of them, you will have been fined £100 automatically. Unless you act immediately, that fine will increase over the next few months.
HMRC has set the following fines for late submission of self assessment tax returns:
- One day late: £100
- Three months late: £10 a day, in addition to the above penalty.
- Six months late: 5% of the tax due or £300, whichever is higher, in addition to the above penalties.
- Twelve months late: you may be fined 100% of the tax due
You will also be fined for paying your tax bill late, at a rate of 5% of any unpaid tax after thirty days, six months and twelve months.
To calculate how much you owe in fines and interest, you can use the Government’s online tool.
Given how quickly these fines pile up, you should pay your tax and submit your tax return as soon as possible. You’ll have to do this online, as the deadline for filing paper returns was 31st October and they are no longer being accepted.
If you failed to pay your tax on time, you should contact HMRC straight away. If you have a genuine reason for not paying, the organisation will show leniency. The penalties are aimed at tax evaders and those who repeatedly fail to pay.
If you make an appeal to HMRC, you should be prepared to provide proof. There are a number of genuine excuses which can be used to have your late payment fine refunded, though you need to be aware that each appeal is considered on a case-by-case basis.
These genuine reasons are often matters out of your control, such as:
- You experienced a serious illness or spent time in hospital
- Computer failure
- The death of a loved one
- Fire, theft, flooding
- Issues with HMRC’s online services
You can submit your appeal online or using an SA370 postal form. Before you do, make sure you’ve filed your return. Should HMRC agree that your excuse is valid, you will be refunded your late payment fine. You will then need to make your payment as quickly as possible.
Avoiding The Issue in Future
So that you don’t run into trouble with HMRC in future, it’s worth ensuring you employ an accountant who can advise you of deadlines and assist you in filling in the appropriate paperwork.
Salford tax advisors, MCC Accountants are the perfect choice for self employed and freelance workers. Speak to a member of our knowledgeable team on 0161 707 1500 or fill in the contact form here and we’ll get back to you.