The Dangers of Not Submitting Your Tax Return On Time
It's tempting to think that a £100 fine is a small price to pay for filing your tax return late. After all, it's only a small amount and you may not even have to pay that is it turnsNS0-101 out your tax liability is low as HMRC cannot fine you more than the tax that is owing (though that is likely to change soon). In reality, however, there are more problems with this attitude than there appear to be at first sight.
Most importantly, the period in which HMRC can initiate an enquiry (called the enquiry window)is lengthened, so you have to wait longer before you can be sure there will be no comeback on the figures you have submitted. HMRC normally have twelve months from the date you file your tax return in order to start an investigation. If the tax return is submitted late, HMRC have until the quarter day after the anniversary of the actual filing date (Quarter days being 31 January, 30 April, 31 July and 31 October), which could turn out to be fifteen months later.
In addition, HMRC are more likely to launch an enquiry into your tax return simply because it is submitted after the deadline and you are likely to find that any insurance that covers professional fees for dealing with an HMRC investigation is likely to be invalid if the return is submitted late. The insurers understandably consider that you are bringing yourself to the Revenue's attention and their risk has therefore increased. If you have such a policy, it would be good to check the small print.
And if you do not pay your tax liability on time, there are further penalties that await you in addition to the final and interest charges on late payment. Each year in February and August, a 5% NS0-163surcharge is charged on the amount outstanding on your tax bill. So, if you leave off paying for eight or nine months, the actual interest rate could turn out to be dramatically more than you counted on. If you fail to submit the return for twelve months then a further $100 fine is due.
By the way, you should be aware that following a legal case some years ago, tax returns filed by midnight on 2nd February will be treated as being filed on time. And If HMRC issue a tax return late, then you have three months from the date of issue to file the return without penalty.
So the lesson is, complete your tax return on time. There are ten months each year in which to do it. If you are unsure you will do it yourself, then use a professional to do it for you. Part of the service they will offer is to regularly remind you of the need for information to ensureNS0-154 that you are not late. After all, if you don't give them the information to submit the return, they don't get paid!
If HMRC issue a tax return late, then you have three months from the date of issue to file the return without penalty.
Most importantly, the period in which HMRC can initiate an enquiry (called the enquiry window)is lengthened, so you have to wait longer before you can be sure there will be no comeback on the figures you have submitted. HMRC normally have twelve months from the date you file your tax return in order to start an investigation. If the tax return is submitted late, HMRC have until the quarter day after the anniversary of the actual filing date (Quarter days being 31 January, 30 April, 31 July and 31 October), which could turn out to be fifteen months later.
In addition, HMRC are more likely to launch an enquiry into your tax return simply because it is submitted after the deadline and you are likely to find that any insurance that covers professional fees for dealing with an HMRC investigation is likely to be invalid if the return is submitted late. The insurers understandably consider that you are bringing yourself to the Revenue's attention and their risk has therefore increased. If you have such a policy, it would be good to check the small print.
And if you do not pay your tax liability on time, there are further penalties that await you in addition to the final and interest charges on late payment. Each year in February and August, a 5% NS0-163surcharge is charged on the amount outstanding on your tax bill. So, if you leave off paying for eight or nine months, the actual interest rate could turn out to be dramatically more than you counted on. If you fail to submit the return for twelve months then a further $100 fine is due.
By the way, you should be aware that following a legal case some years ago, tax returns filed by midnight on 2nd February will be treated as being filed on time. And If HMRC issue a tax return late, then you have three months from the date of issue to file the return without penalty.
So the lesson is, complete your tax return on time. There are ten months each year in which to do it. If you are unsure you will do it yourself, then use a professional to do it for you. Part of the service they will offer is to regularly remind you of the need for information to ensureNS0-154 that you are not late. After all, if you don't give them the information to submit the return, they don't get paid!
If HMRC issue a tax return late, then you have three months from the date of issue to file the return without penalty.
|
|
