The Impact of Missing the HMRC Tax Return Deadline
According to HM Revenue and Customs (HMRC), an estimated 1.1 million people missed the HMRC tax return deadline recently. This means that thousands are now facing an initial penalty of £100 for failing to file their annual tax return on time, unless they can provide a valid excuse. In contrast, over 11.5 million individuals completed the self-assessment process, with more than 31,000 filing during the final hour before the deadline.
What This Means for You?
For many self-employed individuals or those with multiple income streams, filing a tax return is an annual requirement. The rush to complete these filings is understandable given the complexities involved, and for some, the pressure was compounded by unexpected issues such as IT problems at Barclays.
Although the payment deadline was set for 31 January, HMRC has been clear that late payment penalties won’t be applied until 1 March. Barclays has reassured customers that no one will incur extra costs due to delays from their technical difficulties.
Understanding the Penalties
For anyone who missed the deadline, HMRC has outlined a structured penalty system to encourage prompt submission:
- Initial Penalty: A minimum of £100, even if no tax is due.
- Daily Penalties: An additional £10 per day after three months, capped at a maximum of £900.
- Six-Month Penalty: A further charge of 5% of the tax due or £300—whichever is greater.
- Twelve-Month Penalty: An additional charge at the higher of another 5% of the tax due or £300.
HMRC’s Director General for Customer Services, Myrtle Lloyd, emphasized the importance of filing as soon as possible to avoid escalating penalties. In addition to filing penalties, there are fines and interest charges for late payment of tax owed.
Tips to Avoid Further Issues
- File Early: With the HMRC tax return deadline looming every year, filing early can help you avoid the last-minute rush and potential IT issues.
- Check Your Information: Ensure that all details on your tax return are correct to avoid delays in processing.
- Prepare for Payment: Organize your finances ahead of the tax payment deadline to prevent any late payment charges.
- Appeals Process: If you have missed the deadline, remember that you can appeal against a fine by submitting a form or writing to HMRC. However, you must have already completed the self-assessment before making an appeal.
Seamless iXBRL Filing with DataTracks
For those looking for a smoother and more efficient way to manage their tax filings, particularly ixbrl filing services, DataTracks offers industry-leading solutions:
- Fast Turnaround: Get iXBRL-ready files in 1-3 days (express delivery) or 10 days (standard delivery).
- 19+ Years of Expertise: Trusted by 7 of the top 10 UK accounting firms.
- End-to-End Support: Comprehensive services including CT600/CT1 filings.
- Flexible Solutions: Ideal for handling one file or many—customized to your specific needs.
Ref: https://www.bbc.com/news/articles/cdjdm9mrdzxo