The deadline for your online self-assessment tax return is coming up fast – 31 January 2017 to be exact. If you have an accountant who handles this on your behalf, it’s likely to already be neatly in hand. But if, like a lot of contractors, you handle your tax return yourself, make sure you have it submitted on time.
What happens if I miss the deadline?
If you miss the 31 January 2017 deadline, you will ultimately have to pay more. This is the same if you submit your paper tax return before 31 January 2017, but after 31 October 2016 (the deadline for paper tax returns). If you have missed the paper deadline, make sure you complete an online tax return before 31 January to avoid a fine.
The penalties for missing the deadline become steeper the longer you delay, regardless of whether or not you owe any tax payments:
- At one day late, you’ll be fined £100 automatically.
- After this there is a fine of £10 per day for up to 90 days (three months), reaching £900 maximum. This means your total fine could be as much as £1,000 once the automatic fixed penalty is added on.
- If you are between three and six months late, the fine is either 5% of the tax owed or £300 — whichever is higher. And this is on top of the penalties already mentioned.
- Up to 12 months late, there is another fine of either 5% of the tax due or £300 — whichever is higher — on top of the aforementioned fines. This means your total penalty could be £1,600 or more.
If you are more than 12 months late you could also be asked to pay any outstanding payments as well as 100% of the tax due, effectively doubling your payment. And any late payments will incur interest.
Do HMRC waive penalties for late tax returns?
HMRC may only waive late tax return penalties if you can make a ‘reasonable’ excuse. According to HMRC’s website, this constitutes something ‘unexpected or outside your control that stopped you meeting a tax obligation.’
This could be:
- The recent death of your spouse or partner
- An unexpected hospital stay
- Computer failures
- Service issues with HMRC’s online submission service
- A fire at your home or office, preventing you completing your tax return
Forgetting is certainly not a ‘reasonable’ excuse!
Are there exceptions to the deadline?
The only exception to this deadline is if HRMC issued your notice to make an online tax return after 31 October 2016. In this case you have three months from the issue date to submit your online tax return. For instance, if your notice was issued by HMRC on 7 November 2016, your return would be due by 7 February 2017. We highly recommend that, even if this is the case, you check your notice from HMRC to make sure you are confident of your dates.