Deadlines and Penalties
Now that you’re aware of whether you have to do a tax return and what records you need to keep, you’ll need to know when you actually have to do the thing by and when you’ll have to pay your tax. It’s fairly simple to keep track, but it does depend on whether you’ll be doing your assessment online or on paper.
If you’re going down the traditional route, then your deadline is midnight on October 31 after the end of the tax year. That means you’ll have about seven months to get everything together and sent off. This is ample time, but try not to procrastinate too much!
If you’re going to be submitting your forms over the internet, you get a fair bit more time to sort everything out. The deadline is midnight on January 31 after the end of the tax year. That is loads of time, but be careful. Make sure you to register for online Self Assessments. It can take a bit of time to set up and it won’t be a valid excuse if you don’t get everything in place on time. Make sure you register as soon as the tax year ends, even if you don’t intend on filing your records straight away.
There is an earlier deadline of December 30 if you want HMRC to get their tax from your tax code instead. Make sure this is all clearly stated on your form if you want to use this method.
Penalties for Late Returns
Now, unsurprisingly, there are plenty of people who miss their deadlines. It’s just what we humans are like. Give us all the time in the world and we’ll still manage to mess it up. Either way, there are going to be some penalties from HMRC if you fail to file with them on time.
One day late: £100
Three months late: £10 for each following day to a maximum of £900
Six months late: £300 or 5% of the tax you owe (the higher will apply)
Twelve months late: £300 or 5% of the tax you owe (the higher will apply although in severe cases they may ask for 100% of your tax)
Also, keep in mind. There are accumulative! Get up to twelve months late and you’re looking at at least £1,600 in fine. Not a pretty sum at all
Paying Your Tax Deadline and Penalties
There is also a deadline for actually paying the tax you owe which is the 31 January. Miss this and there is a whole new set of penalties to incur based on interest.
Thirty days late: 5% of the tax you owe at that date
Six months late: 5% of the tax you owe at that date
Twelve months late: 5% of the tax you owe at that date
Again, these are accumulative too, so don’t waste any time. Get your tax paid on time!