HM Revenue and Customs (HMRC) is introducing a new £10 daily late filing fee for late Self Assessment tax returns, with personal finance experts warning that “hundreds of thousands of people” could be affected despite the January 31 deadline.
Alastair Douglas, CEO at TotallyMoney, said: “While the initial £100 fine might not have been enough to encourage some to get going, from today, HMRC will start charging late filers an extra £10 per day. This is on top of the eyewatering 8.5 per cent late payment interest rate on outstanding balances.”
He continued: “If in three months’ time you still haven’t filed your return, the taxman will hit you with a penalty of 5 per cent of the tax due or £300, whichever is greater. Any penalties need to be paid within 30 days, and can be done in several ways, including Direct Debit, bank transfer, or by cheque.”
Douglas also advised: “If you have a ‘reasonable excuse’ you can challenge your penalty, and reasons include the death of a close relative, serious illness and issues with HMRC‘s online services. If you’re struggling to pay your bill in full, then head over to the HMRC website, where you might be able to set up a payment plan, under a ‘Time to Pay’ arrangement.”
Claire Trott, Head of Advice at St. James’s Place, warned that “pressure is rising” for those who have yet to submit their tax return, reports the Daily Record.
Ms. Trott said: “While completing a tax return is often a dreaded task, and one may choose to put it off, getting it sorted now could save you from significant financial penalties down the line.
“Up until now, late filers have faced a one-off fine of £100, but from today the consequences will become even greater. The £10 a day penalty will continue for 90 days, potentially adding up to £900 if the return is not submitted during this period.
“Further penalties of 5% of the tax due or £300 (whichever is greater) will apply at both the six month and 12 month mark for those who still haven’t filed.”
Submitting your tax return might be seen as a chore, but anyone registered for Self Assessment must do so, regardless of whether they owe tax. Ignoring HMRC‘s reminders or warnings can lead to severe financial repercussions.
She added that although filing your tax return today won’t negate any fines incurred thus far, doing so could halt the accrual of additional charges.
Ms. Trott said: “The quickest and simplest way to do this is to complete HMRC‘s online form. While the process may seem daunting, there are plenty of tips and guidance available on the HMRC website, and if your finances are particularly complex, speaking to a financial adviser is always a good option for those who are able.
“With today’s penalties likely to cause alarm for those who are unaware, the most important thing is not to rush the return process as this could cause you to leave out vital information that could result in paying more tax than necessary.
“There are a number of details – such as gift aid payments, and necessary work expenses – that can be easy to forget about when filing a return but can amount to significant tax relief. It’s important to take time to include all relevant information to ensure you receive the full tax relief you’re entitled to.”