Better Late Than Never For Tardy Tax Returns 

The deadline for self-assessment may have passed, but for the hundreds of thousands of people that each year miss the deadline, all is not lost. Chas Roy-Chowdhury, ACCA’s head of taxation, has a rundown of what to expect.

Chas Roy-Chowdhury’s first piece of advice is to act fast:

‘First of all, it’s important to know that if you have missed the deadline. You can still submit your return and filing a couple of days late will earn you nothing worse than a £100 fine from HMRC.

‘Don’t make the mistake of burying your head in the sand. It can be tempting to ignore a problem like this in the hope it’ll go away, but the reality is, if you have to miss the deadline it is far better to ensure it’s only by a few days.

‘The worst thing you can do is ignore the issue as it will only get worse with time.’

That’s because the longer you take to submit your return, the more fines you will incur, says Chas Roy-Chowdhury:

‘You’ll get a penalty of £100 if your tax return is up to three months late and you’ll have to pay more if it’s later than this.

‘That means after you have stumped up the £100 fine, you do have time to get things sorted before you are hit with more charges. My advice would be to use those days to good effect.’

According to Chas Roy-Chowdhury, a little guess work can help to keep unnecessary expenditure to a minimum if you haven’t completely finished your self-assessment by the 31 January:

‘If you know you’re going to owe some tax, but you are not quite sure how much, paying your best estimate now will keep any later interest charges to a minimum. If you overpay you will always be able to claim it back and paying something at this stage is always better than nothing.’

Of course, there may be a very good reason why you haven’t filed your tax return on time. HMRC does accept ‘reasonable’ excuses for filing late but according to Chas Roy-Chowdhury, the key is to tell them what has happened as soon as possible:

‘Don’t wait until HMRC send you a penalty notice. Act now by completing a claim form to let them know.

‘There are a number of situations where HMRC will show leniency. A computer breakdown as you tried to file or a system failure on HMRC’s part for example. They will also hear you out if your records have been destroyed, for example by a fire or by flooding.

‘You will need to provide evidence of anything of this nature though, so my advice to anyone tempted to get creative with their excuses would be simple – don’t bother.’

Taxpayers who persistently file and pay late are more likely to attract unwelcome attention from HMRC says Chas Roy-Chowdhury:

‘If you fail to hit the deadline year after year, HMRC may start to suspect there is more to your tardiness than just poor timekeeping. Everyone makes the odd mistake, and missing the deadline once isn’t the end of the world. The key is to make sure it never happens again.

‘My advice would be not to think of January as your ‘accounting month’.  Set aside time throughout the year so when the time comes to file your self-assessment, the job is a simple one.’

The final piece of advice from Chas Roy-Chowdhury is not to be afraid of getting a little help from those who have been through it all before:

‘If you are totally at a loss, seek the help of an expert. While that will obviously cost you money, the likelihood is it will be far less than the potential expenditure of letting the situation go on unchecked.’

Source: ACCA – Better Late Than Never For Tardy Tax Returns