Have you missed the 31 January tax return filing deadline?

As I am sure most people are aware, 31 January 2014 was the online filing deadline in respect of Tax Returns for the year ended 5 April 2013.

If you have missed this deadline for whatever reason then all is not lost, but you must act sooner rather than later to remedy the situation.  If H M Revenue and Customs sent you a notice to complete a Tax Return shortly after 5 April 2013, but you have not yet filed this, then there will be an automatic £100 penalty that you will have to pay even if there is no tax payable or if you have already paid all of the tax that you think you might owe.  In some circumstances you may have slightly longer within which to file your Tax Return if, for example, H M Revenue and Customs have only recently issued you with a notice to complete a 2012/13 Tax Return.  If that is the case then you usually have three months after the date of such notice within which to prepare and file your Return.

At present therefore the maximum penalty for most people who have not yet submitted their Returns will be the flat rate penalty of £100.  There will, however, be interest charged on any tax which has not been paid by 31 January 2014 (including any payment on account toward your 2013/14 tax liability if that applies to you).  That interest will be charged at 3% per annum and it is worth noting that any tax which remains unpaid at 28 February 2014 will incur a further 5% surcharge.

The above penalties and potential interest may already seem punitive enough, but if your Tax Return was due to be submitted by 31 January 2014 and is still not submitted by 30 April 2014 then even more significant penalties are levied at the rate of £10 per day (up to a maximum of £900).

There are further penalties levied if the Return is more than 6 months late (£300 or 5% of the tax due, whichever is the higher, in addition to the penalties mentioned above) and if the Return is more than 12 months late (an additional £300 or 5% of the tax due, whichever is the higher, and in serious cases can be as much as 100% of the tax due).  Similar surcharges of 5% are also applied to late payment of tax if the tax remains unpaid after 6 months and 12 months in addition to the 5% surcharge if the tax is not paid by 28 February 2014. 

As I am sure you will appreciate, because of the potentially significant penalties referred to above, it is much better to try to bring matters up to date as soon as possible even if you have missed the 31 January 2014 filing deadline.  Please contact us if you would like any assistance with bringing your tax affairs up to date or if there is anything else you would like to discuss.

It is also worth pointing out that late submission of your Tax Return can have other, maybe less immediate, financial implications which can include invalidating any insurance policy which you may have in place for professional fees arising on any tax enquiry that H M Revenue and Customs undertake in respect of your tax affairs.  You may therefore want to read the small print of any such insurance policies very carefully.

The above is for general guidance only and no action should be taken without obtaining specific advice