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What do I do if my tax return is late?

What do I do if my tax return is late?
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    Whether you’ve completely forgotten about your tax return this year or had other problems completing it, you may be liable to face a penalty if you miss the deadline. If you have already missed the deadline, however, you will still want to act fast since interest and extra payments can start to accumulate the longer your tax return remains outstanding. Read on for the answer to your questions and find out what to do if my tax return is late.

    The first thing you’ll need to do if your tax return is late, is contact HMRC as soon as possible to avoid your fine accruing. After this, it is down to you to pay the owed amount as quickly as you can or arrange a repayment schedule with them.

    If there was an unavoidable reason you missed the tax deadline, you may find there is some leniency. HMRC will consider a valid reasonable excuse (something unexpected and unavoidable that prevented you from completing your tax obligations). If you took reasonable care to complete your tax returns but something stopped you, HMRC may consider your extenuating circumstances.

    These could include being involved in an accident or injury meaning that you had to spend an unexpected length of time in hospital which would prevent you from sorting your tax affairs. Another reasonable excuse could be if a partner or close relative died before the tax return or payment deadline which would have stopped you from meeting your tax obligations.

    What happens if you miss tax return deadline in the UK?

    If you do have a reasonable excuse that you think will apply, you need to contact HMRC as soon as possible and fill in a reasonable excuse claim form.

    If you are required to send a tax return but you miss the deadline for either submitting your tax returns or paying your bill, you will get a late payment penalty in the form of a fine.

    How much is HMRC late payment penalty?

    Currently, if you miss your tax return and it is late by up to three months, you’ll be required to pay a late filing penalty of £100. At three months late or if you pay your tax bill late, interest is also charged.

    In the coming years, however, the government is planning to update these sanctions. The alterations will start to take effect for some customers in 2023 and continue to be rolled out until 2025.

    What will the new late payment penalties be?

    Under the new regulations, the first penalty is set to be 2% of the outstanding tax after the 15th day and will typically result in a 4% charge on the 30th day.

    A second penalty is in place for if the tax is still not paid after 30 days. Beginning on the 31st day additional penalties will accrue on a daily basis, at a rate of 4% per annum on the outstanding amount.

    How can I handle my finances?

    If you have trouble keeping on top of your finances, or constantly find yourself having to look into ‘what to do if my tax return is late’, make sure to take note of the deadlines you are facing.

    For example, the deadline to file your 2021 to 2022 tax return online as well as pay any tax you owe is 31 January 2023.

    There is also a new initiative called Making Tax Digital aimed at businesses as well as individuals, which helps to make keeping track of your taxes easier.

    How can I get help with self-assessment?

    If this still sounds daunting, or you want to complete your taxes as quickly as possible to avoid further escalation of fines, it might be better for you to seek help with your tax returns to make sure you don’t have to worry about them every year.

    There is lots of guidance as well as help sheets provided, however, this wealth of online information can only make your job longer and more tedious. The easiest and most reliable solution is to appoint someone, such as an accountant, to fill out and send your tax return for you.

    At WIS Accountancy, we offer personalised accountancy including tax advisory, so if you are struggling with tax returns, we can help.

    We are also well equipped to assist you with wealth and pension management, Xero accountancy, SEIS (Seed Enterprise Investment Scheme) and assist businesses with R&D tax credits.

    Struggling to keep on top of your taxes on your own can be hard and can end up costing you a lot. So why not let us help you by calling us on 0203 011 1898 or book a free initial consultation with us today so that you never face this problem again?

    FAQs

    Will HMRC waive penalties?

    It is possible for the penalties to be appealed, but only if you can provide a reasonable excuse. If you can, you may find that your penalty can be amended or waived, depending on the reasoning for your appeal.

    What is reasonable excuse for HMRC?

    Accidents or injuries which meant you had to spend an unexpected length of time in hospital would count, as well as a partner or close relative dying before the tax return or payment deadline.

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