Anyone who has yet to submit their 2016/17 self-assessment tax return form is being urged to do so before the end of this month to avoid daily penalties of £10 accruing
While anyone who did not file their tax return by the 31 January 2018 deadline will already have been charged a penalty of £100, they will also have to pay a daily penalty on top of that if it is more than three months late.
The Low Incomes Tax Reform Group (LITRG) points out that for online returns with a 31 January 2018 filing date, additional penalties will kick in from 1 May 2018.
The £10 daily penalties continue to be chargeable for up to 90 days unless the taxpayer submits their return within that time.
About 10.7m people submitted their annual tax returns by midnight on 31 January 2018 but HMRC estimated that 745,588 people missed the deadline.
Robin Williamson, LITRG technical director, said: ‘If a tax return for 2016/17 has still not been filed by 31 July 2018, the initial penalty of £100 and the daily penalties chargeable will amount to a total of £1,000, in addition to which a further penalty of at least £300 becomes chargeable.
‘These automatic penalties take no account of the amount of tax an individual owes – even if you owe nothing or are owed tax back.’
Williamson pointed out that anyone who has registered for self-assessment must submit a tax return or inform HMRC that they no longer fall under the self-assessment criteria and ask HMRC to agree to cancel the requirement for the tax return. If they do this, then any late filing penalties will also be abated.
‘If someone believes they do not need to be in self-assessment, for example because their taxes are fully dealt with under the PAYE system or simple assessment, or because they have left the UK, they should be able to ask HMRC to withdraw the notice to file a tax return. Such an application must be made within two years of the end of the tax year to which the return relates.
‘Even if they cannot get HMRC to cancel the requirement for the tax return to be filed, late filing penalties can be appealed if there is a reasonable excuse for filing late such as prolonged ill-heath, bereavement or family breakdown,’ Williamson said.
Those who should have registered for self-assessment for 2016/17 but have not yet done so, do not fall under this penalty regime. Specific rules apply to such ‘failure to notify’ cases – penalties are based on the amount of tax lost as a result of the failure to notify and are stepped according to whether or not the failure is deliberate and the quality of any disclosure.
Report by Pat Sweet
