Late Filing Penalties by HMRC

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Not Filing tax returns to HMRC

At time we have observed that people get themselves registered for self employment for one reason or another without realising that it becomes compulsory for them to file tax returns to HMRC every year with out failing. Most of the time , people think as they have not earn any income or have not really engaged in self employment activities so there is nothing to declare. But this is where the burden start increasing and late filing penalties kick in.

If you fail to submit the tax return before 31st January, even though you have nothing to declare, HMRC imposes automatic late filing penalties. You’ll get 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. Interest is charged on both unpaid tax and unpaid penalties.

Most of the times, these penalties are incurred mainly due to ignorance and as the years pass by, the amounts start accumulating and become very scary. We have seen it on numerous occasions and have presented the case to HMRC and successfully won many many appeals. The image to this post is real live example of the client where we have won the appeal on behalf of our client and saved thousands of pounds.

Reasonable Excuses

You can always appeal against late filing penalties, if you have reasonable excuse like

  • 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
  • delays related to a disability you have

The Solution

The above may or may not apply to you and there could be other mitigating circumstances that can be looked into. If you for any reason find yourself in this position, always refer to tax adviser and seek professional help. That can save you money and undue stress.

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