If you are self-employed, a director or partner in a business, or you are the trustee of an estate, you will need to complete a self-assessment tax return and ensure that you pay it on time. Your tax return should be completed by the 31st January 2022.
You may also need to complete a tax return if you have any other untaxed income such as the following:
- Money from renting out a property
- Tips and commission
- Income from savings
- Investments and dividends or foreign income.
It’s important that your tax return is accurate and paid on time as failure to submit your tax return can result in a number of different penalties, which can be incredibly costly.
What are the penalties if you pay your tax return late?
Everyone receives a penalty notice if they fail to submit their tax return on time, or fail to pay the return on time. According to Gov.uk, you’ll pay a late filing penalty of £100 if your tax return is up to 3 months late. You’ll have to pay more if it’s later, or if you pay your tax bill late.
But that’s not all… for any deadlines missed, you will also be charged interest on both unpaid tax, as well as unpaid penalties.
The penalties are outlined as follows:
- Miss filing deadline of 31 Jan – Automatic £100
- 30 days late – 5% of tax due
- 3 months late – Daily penalty £10 per day for up to 90 days (max £900)
- 6 months late – 5% of tax due or £300, if greater
- 6 months late – 5% of tax outstanding at that date
- 12 months late – 5% or £300 if greater
Can you appeal against a penalty notice?
Yes, if you believe you have a valid reason to appeal against self-assessment penalty notice you are free to do so however, you must appeal within 30 days of the date HMRC sent you the penalty notice.
According to Gov.uk, you can begin the appeal process by:
- Use the online service to appeal against a £100 late filing penalty for tax returns. To use the online service, you need a Government Gateway user ID and password. If you do not have a user ID you can create one when you use the service.
- Print the postal form SA370, fill it in and post to HMRC to appeal against a penalty for sending tax returns late for earlier years or paying your tax late.
Why choose React Accountancy?
Here at React Accountancy, we provide trusted accountancy services to start-up, established and multi-national businesses across a diverse range of industries.
From the moment you get in touch, our approachable, friendly and professional team will go above and beyond to ensure that you receive the right advice, support and accountancy solutions for your business.
All of our team has years of experience in providing accountancy services that support your business including complex financial issues.
Get in touch today for further information about any of our services.
You can reach us on 01914324110 or contact us via email using email@example.com