In the run-up to the Self Assessment online submission deadline of January 31st, we’re running a series of how-to articles explaining how freelancers and contractors can complete their Self Assessment tax return with the minimum of fuss. In the final part of our series, we look at what happens if it all goes wrong!
So, you’ve diligently registered for Self Assessment, collected and organised all your financial records, and come to complete your tax return when – disaster – you realise you don’t have a certain bank statement or tax form, and can’t get it until after the January 31st deadline!
Or, the more likely scenario, you completely forgot about your Self Assessment, remembered on the evening of the 31st only to find you haven’t registered to get a UTR, so can’t file.
Whatever your excuse, if you don’t submit your Self Assessment by 11:59:59pm on January 31st you’ll be in line for a tasty fine, with more looming down the road if you delay further!
If you miss the deadline you will be hit with an on-the-spot, do-not-pass-Go £100 fine. You will by no means be alone; in January 2012 around 850,000 people missed the deadline (meaning a windfall of £85 million for HMRC overnight). After this initial penalty you will have three months to get your act together and file your Self Assessment.
Should three months pass and you have still not filed, HMRC will begin to fine you £10 per day for up to 90 days. If those 90 days elapse and you’ve still not filed, you’re in line for an additional fine of £300 or 5% of the tax you owe – whichever is greater. This same fine will be applied after twelve months, too.
So if a year should go by and HMRC have yet to receive your Self Assessment, you will have accrued a minimum of £1,600 in fines.
HMRC also have additional powers to punish those they believe are intentionally withholding information from them or attempting to conceal their true tax liabilities, including a fine of up to 100% of their tax liabilities in addition to the penalties above.
So, the moral of the story is do not delay! HMRC claim their penalty regime is designed to encourage submission rather than generate income through fines – however you look at it, everyone benefits from an accurate and on-time Self Assessment.
Photo by William Warby