The deadline to file your online self-assessment tax return for 2015-16 is 31 January 2017 – and failure to do so can be very costly.
Penalties for late returns start with an initial fixed penalty of £100 – which applies even if there is no tax to pay, or if the tax due is paid on time. Beyond this, penalties increase in line depending upon how late the tax returns are and after a 12 month delay, will be at least £1,600.
So it’s incredibly important you don’t miss these deadlines.
These penalties may be waived if you can provide a genuine and valid reason for the delay. However, this is rare and generally only granted in extreme circumstances – but this doesn’t stop some people trying to avoid a fine with an excuse.
The top ten excuses that have all been unsuccessful in appeals against HMRC penalties are:
- My tax return was on my yacht, which caught fire.
- A wasp in my car caused me to have an accident and my tax return, which was inside, was destroyed.
- My wife helps me with my tax return, but she had a headache for ten days.
- My dog ate my tax return…and all of the reminders.
- I couldn’t complete my tax return, because my husband left me and took our accountant with him. I am currently trying to find a new accountant.
- My child scribbled all over the tax return, so I wasn’t able to send it back.
- I work for myself, but a colleague borrowed my tax return to photocopy it and lost it.
- My husband told me the deadline was the 31st March.
- My internet connection failed.
- The postman doesn’t deliver to my house.
Ruth Owen, HMRC Director General of Customer Services, said: “Blaming the postman, arguing with family members and pesky insects – it’s easy to see that some excuses for not completing a tax return on time can be more questionable than others. Luckily, it’s only a small minority who chance their arm.
“But there will always be help and support available for those who have a genuine excuse for not submitting their return on time.
“If you think you might miss the 31 January deadline, get in touch with us now – the earlier we’re contacted, the better.”
Who needs to fill in a tax return?
In general, if you are self-employed, or have PAYE income but earn money from another source, you will need to complete a self-assessment return.
Other earnings can include any profits made from activities such as eBay sales, letting out your spare room on Airbnb – income such as this is all potentially taxable.
There is also a relatively new category of people who have to do a return. If either you or your partner’s income is more than £50,000 and one of you claimed child benefit, then you must do self-assessment.
Pensions – tax relief
This is also the time to use your tax return to claim back any higher rate or additional tax relief you are entitled to on pension contributions have made during the year.
Remember to include any pension contributions you made in the 2015/16 tax year (6 April 2015 to 5 April 2016). If you’re a 40% or 45% taxpayer, it could significantly reduce your tax bill.
Your pension provider should be able to provide you with a statement confirming the amount you have contributed – this value then needs to be entered in the ‘Tax reliefs’ section of your tax return.
If you’ve already completed your return online and didn’t claim your tax relief, you can log back in and amend it before 31 January. Alternatively, you may be able to do it separately through your tax office.
If you don’t, you could lose what’s due to you and end up paying more tax than is necessary.
Don’t be late
January 31st is only a week or so away. So if you haven’t already done so – and unless you have a better excuse than those listed above (and one that HMRC will listen to!) – start getting your tax return ready.
If we can be of any assistance in this area, please do not hesitate to contact us.
This information should not be regarded as financial advice. Laws and tax rules may change in the future. The information here is based on our understanding in January 2017. Your personal circumstances also have an impact on tax treatment.