13th January 2017 at 4:00pm
31 January is the deadline to file your online tax return, fail to do so and be prepared for a fine.
It can be an expensive delay. After the initial £100 fine for late filing, penalties spiral in line with how late the tax returns are and, after a 12-month delay, hit a minimum of £1,600.
So it’s incredibly important you don’t miss these deadlines.
There’s no easy excuse
The penalties may be waived if you can provide a reasonable excuse but this is rare and generally only granted in extreme circumstances; people will try their luck however.
Paperwork being burnt in a yacht fire and a wasp attack both made the list of the top 10 most unusual excuses for failing to file a tax return on time this year, HMRC has revealed.
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.”
These excuses were all used in unsuccessful appeals against HMRC penalties:
- 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.
Who needs to fill in a tax return?
Generally speaking, anyone who is self-employed or has a PAYE job but earns money from another source will need to fill in a self-assessment return.
That includes any profits you make from a sideline be it some eBay trading or letting your spare room on Airbnb, as all this income is potentially taxable.
There is also a relatively new category of people who have to do a return: if you or your partner’s income is more than £50,000 and one of you claimed child benefit, you must do self-assessment.
If you’re about ready to embark on filling out the forms, then it’s good to have the following at your fingertips. If you are employed, you’ll need your P60 or P11D, and if you are self-employed, your accounts and records of expenses.
If you have savings, you’ll also need to dig out any records of interest received and, in the case of investments, any income, including dividends, you received.
Just as importantly, you may need to use your tax return to claim back any higher or additional tax relief you are entitled to on contributions you have paid into your pension.
If you don’t, you could lose what’s due to you and end up paying more tax than is necessary.
If you have basic and straightforward accounts, there is also plenty of help and advice available online from HMRC that can guide you through the process.
But if your financial affairs are a little more complex it can be beneficial for you to have an accountant prepare the return and even file it on your behalf. An accountant may be able to identify expenses and deductions which can reduce your tax bill; this can be particularly valuable if you’re a business owner.
31 January is closing fast, so if your yacht is not in flames, your internet is working and your dog doesn’t have a penchant for paper, then you’ve no excuse (one they’d listen to anyway) – start getting your tax return ready.
The information in this blog or any response to comments 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.