What a difference a day makes

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As we’re about to hit a Self Assessment Tax Return penalty deadline it’s probably wise to refresh everyone on how much and when penalties are issued for the late submission of a tax return.

As most people are aware, excluding unusual circumstances, your Self Assessment Tax Return has to be submitted to HM Revenue & Customs by the 31st January following the end of the tax year, e.g. for the tax year ended 5th April 2016, the return has to be submitted by 31st January 2017. For those who do not file on time the penalty regime into play.

Penalties for the late filing of a return depend on just how late the return is. The rules state that:

  1. A £100 penalty is issued if the return is not submitted by the filing date
  2. If the return is still not submitted after 3 months, £10 daily penalties are issued for the next 90 days. If the return is submitted 22 days or after into this 90-day period, then an additional £220 penalty will be issued
  3. If the return is not submitted at 6 months, a penalty based on either 5% of the outstanding tax (calculated when the return is finally submitted) or £300, whichever is higher is issued
  4. If the return is still not submitted 12 months after the deadline another 5% of the outstanding tax or £300, whichever is higher is issued

There are even stronger penalties if HMRC can prove that you are deliberately not submitting your return simply to avoid having to pay your income tax liability.

Most important of all, when each of the above penalties are added together, if the return is 12 months late a minimum penalty of £1,600 will be issued.

It is possible to appeal against a penalty issued if you have a reasonable excuse for the return being late.

As we are about to hit the beginning of daily penalties can I suggest that if you haven’t submitted your 2016 tax return you speak to us now on 01642 244 090.

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