Late Tax Returns and Reasonable Excuses

What was the deadline?

The deadline for filing 2014/15 self assessment tax returns was 31 October 2015 for paper returns and 31 January 2016 for returns filed online.

If you’ve been asked to complete a tax return for 2014/15 and haven’t filed it yet, you should have been issued with an automatic, initial penalty of £100. After a three month delay, the penalties really start to spiral.

My tax return is late, what should I do? 

In order to get your tax affairs in order, you need to either:

1. Ask HM Revenue & Customs (HMRC) to withdraw the tax return if you think it’s not required

If you believe you’re not required to submit a tax return, you can phone HMRC on 0300 200 3310 and ask for the tax return to be withdrawn. If HMRC agrees, you no longer have to file a return and any penalties issued for missing the deadline should be cancelled.

Make sure you make a note of who you spoke to and when, and what the outcome is expected to be - when will you have a decision from them for example?

HMRC are unlikely to withdraw a return if you have been self-employed at any time during the tax year – even if it was only for a very short time. You usually have only two years from the end of the tax year for which the return is due, in which to ask for a return to be withdrawn.

Or

2. File your return as soon as possible

File your tax return as quickly as possible, as penalties escalate the longer the delay. It also makes sense to file your return online as the deadline for filing online was more recent.

Your local TaxAssist Accountant would be happy to prepare your tax return for you. Simply contact us if you’d like to be put in touch with your local office.

Reasonable excuses

If you’ve filed your 2014/15 tax return after 31 January 2016 you should expect to receive a late filing penalty imminently. If you have a good reason for the delay in filing your return, you may appeal against the penalty.

HMRC provides a list of common examples of Reasonable Excuses on their website such as:

  • Your partner or another close relative died shortly before the tax return or payment deadline
  • You had an unexpected stay in hospital that prevented you from dealing with your tax affairs
  • You had a serious or life-threatening illness
  • Your computer or software failed just before or while you were preparing your online return
  • Service issues with HM Revenue and Customs (HMRC) online services
  • A fire, flood or theft prevented you from completing your tax return
  • Postal delays that you couldn’t have predicted

Last year HMRC announced that it would be fairer on those with genuine excuses because its is focusing on larger, deliberate tax evaders rather than ordinary people. This remains the case, but the excuse must be genuine and evidence may need to be presented.
This year, HMRC said it will also be accepting reasonable excuses up front before the deadline to avoid penalties after the deadline.

Those affected by flooding at their premises, or their agents’ premises, will not be asked to pay a penalty if their return is submitted without unreasonable delay. The department has also opened a Tax Helpline to give practical help and advice to people affected by severe weather and flooding – 0800 904 7900.

Late payments

Any tax liability for 2014/15 was due by 31 January 2016. If it was not paid within 30 days of the deadline, late payment penalties will start to accrue. But provided you fill in the relevant section of your Reasonable Excuse claim, these could be covered also.

Interest is charged for the entire period the tax is outstanding, and this cannot be mitigated.

What's unlikely to be reasonable excuse?

The following aren’t usually accepted as a reasonable excuse:

  • You relied on someone else to send your return and they didn’t
  • Your cheque bounced or payment failed because you didn’t have enough money
  • You found the HMRC online system too difficult to use
  • You didn’t get a reminder from HMRC

How we can help

If you’d like any assistance with preparing your tax return, your local TaxAssist Accountant would be happy to help. We can make sure that all the expenses you’re entitled to recover and any allowances available to you are fully utilised. It gives you peace of mind that your return is correct and that you’re paying the right amount of tax - and not a penny more!

Furthermore, we can also manage your Reasonable Excuse claim for you to give you the best possible chance of being successful in your appeal.

If you’d like to discuss your affairs earlier, please contact us online or give us a call on 0800 0523 555 and we’ll put you in touch with your local TaxAssist Accountant.

By Jo Nockels
Last updated January 2016

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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