If you're required to file your own tax returns each year, due to being self-employed, a business owner, or having several sources of income, it's important to familiarise yourself with the submission deadlines and any penalties and fines attaches.
Self-assessment submission deadlines
Each tax year runs from 6th April to 5th April so your taxable profits will be calculated based on your launch date to the 5th April that tax year, and reported to HMRC. Deadlines for submission are 6-9 months after the tax year has finished, currently specified as 31st October for postal returns, and 31st January for online assessments.
Tax return penalties
If you miss the deadline for your tax return, HMRC will fine you an initial £100. Further fines may be applicable depending on how late you are with your submission:
- 3 Months Late: You will be fined £10 for each day, up to a maximum of 90 days (£900). This is additional to the fixed penalty fine of £100 for late submissions. The overall fine could therefore be £1000
- 6 Months Late: On top of the penalties above, you will also be penalised £300 or 5% of the amount owed – whichever is greater
- 12 Months Late: As well as the fines mentioned above, you will be liable to pay another £300 fine or 5% of the tax due.
In extreme cases you will be asked to pay up to 100% of the tax due as well as any tax you owe, doubling your payment.
If you fell you have a reasonable reason for filing your return late, HMRC offer the chance to appeal to nullify any fines due.
Incorrect tax return penalties
Penalties may be applicable for any mistakes or erroneous information provided on your tax return. This will largely depend on whether HMRC determine that your mistakes are careless, or a deliberate attempt to mislead them.
Penalties are based on the amount of tax owed:
- If you're deemed to have filled in your penalty with 'reasonable care' no fine will be applied
- If it's thought that you've been careless the penalty can be up to 30% of the tax owed
- If you're thought to have deliberately underestimated your tax bill, the penalty is between 20% - 70%
- If you've deliberately underestimated you tax and attempted to conceal the fact, the fines will be between 30% - 100%, depending on the severity of the case
Again if you think you've been unfairly treated, or have a reasonable excuse, you can appeal against any such fines. For more information, please refer to our guide 'Tax Returns – Appeals, Disputes and Complaints'