Despite HMRC getting their all time highest proportion of self assessment tax returns on time, there were still 958,296 taxpayers who missed the SA deadline. What happens to them?
Penalties for missing the self assessment tax return deadline
Financial penalties are what most people are determined to avoid. No one wants to waste money paying an HMRC fine. Unfortunately, as soon as you miss the self assessment deadline, you are issued with an automatic £100 fine.
After that, there is a sequence of penalties that corresponding to the amount of time that has passed since the deadline. These accumulate to your final penalty bill. Some people wrongly assume that the next fine cancels out the precious one. This is not the case. Each fine, for each period of time, adds onto your current total.
Fines for missing the deadline
£10 per day: between three and six months from the deadline, up to £900 maximum
£300 or 5% of your tax bill (the largest amount): between six and twelve months from the deadline, no fixed maximum
£300 or 5% of your tax bill (the largest amount): after 12 months from the deadline, no fixed maximum
And that’s just for not handing in the tax return there are more penalties if you owe HMRC income tax from your self employed income.
Fines for paying your tax bill late
5% of your unpaid tax bill will be charged at the 30 day, six month and 12 month milestones.
But what if I have a genuine reason for missing the deadline?
Angela MacDonald, director general for customer services at HM Revenue and Customs (HMRC), said: “Customers who have missed the deadline should contact HMRC. The department will treat those with genuine excuses leniently, as it focuses penalties on those who persistently fail to complete their tax returns and deliberate tax evaders. The excuse must be genuine and HMRC may ask for evidence.”
As it turns out, having your witch mother in law cast a spell on you is not a reasonable excuse. Yes, someone really did write that.
But all the common sense reasons you would expect do apply, such as:
- Close family death near the deadline date
- You had a serious illness, or were hospitalised unexpectedly
- HMRC online services were not functioning properly
- Burglary, fire, flood and other out of your hands events that interfered with the preparation and submission of your tax return
- Your hardware or software decided to say no, just as you were filing your return.
Just to emphasise the point, you will need to be prepared with evidence to support these reasons behind your HMRC self assessment late penalty appeal.
Eligibility for (COVID-19) Self-employment Income Support Scheme
Acceptance into the new self employment income support scheme, partially depends on you having submitted your 2018-19 self assessment tax return form.
If you are a late filer, don’t despair. In bold text, beside a large exclamation mark, HMRC say:
“If you have not submitted your Self Assessment tax return for the tax year 2018 to 2019, you must do this by 23 April 2020 or you will not be able to claim.”
You’ve still got time. Just get it done, so you can apply for any help you need right now.
