May day! I still haven't completed my tax return

I’ve been working non-stop since I started my own business, but this has meant that I haven’t yet got around to submitting my 2016/17 tax return. How much will it cost me in penalties?

1st May 2018

Your 2016/17 tax return should have been filed online by 31st January 2018 or by paper by 31st October 2017. You will be liable to pay at least an initial £100 penalty – even if there is less than £100 tax to pay. 

Following that initial £100 penalty, more penalties could be added depending on the delay:

  • After three months: additional daily penalties of £10 per day – up to a maximum of £900
  • After six months: a further penalty of 5% of the tax due or £300 – whichever is greater
  • After 12 months: another 5% of the tax due or £300 – whichever is greater. In more serious cases, the penalty after 12 months can be up to 100% of the tax due

Each of these penalties is in addition to one another, meaning a tax return filed a year late could be subject to penalties of at least £1,600 – which could increase, depending on the level of tax due.

You may also be liable for interest and late payment penalties on top if you delay paying any tax due. Tax payments are normally due on 31st January and sometimes the following 31st July – depending on the level of tax liability.

You should make sure you prepare and file your tax return as soon as possible. As you can see, your penalties will increase the longer your tax return remains outstanding. Look into filing your return online (either yourself or through an accountant or tax adviser), as your penalties are likely to be higher if you file a paper tax return because paper returns have an earlier deadline of 31 October.

If you'd like some help getting your affairs in order, please do not hesitate to contact your local TaxAssist Accountant. 

By Jo Nockels

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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