By Daniel Hunter
The latest figures from HM Revenue & Customs (HMRC) showed that more than 890,000 people failed to return their self-assessment tax returns in time for this year’s online deadline of 31 January 2015.
These people will soon be receiving a £100 late filing penalty. But the fines do not stop there and failing to file your tax return in the coming months could lead to bigger penalties further down the line.
If your return is more than three months late you will be automatically charged daily penalties of £10 per day, up to a maximum of £900.
If you leave it longer and a return is not filed within six months an additional penalty of £300 or five per cent of the tax due for the tax year is applied, depending on whichever is greater. This adds up to a total of at least £1,300 due, even if it is discovered that you do not owe any tax at all.
A similar fine will be issued again if the return is not filed within 12 months, however, at this point HMRC can regard a case as being more serious and a higher penalty of up to 100 per cent of the tax due can be issued.
Rob Chedzoy, Tax Partner at Milsted Langdon, is warning people who have not filed their self-assessment to do so now to avoid further penalties in the future.
“Failing to file your tax return on time can have large implications for you and your business,” said Rob.
“Not only is there an immediate fine of £100 to pay, but there is also the prospect of larger fines further down the line. Now is the time to act; don’t leave it any later and run the risk of accumulating fines that could damage you or your business.”
Rob added that he recognised the pressures that running a business can have on an individual’s life; making tax returns a low priority.