Self Assessment tax returns still need to be in on time
Earlier this summer, a news story appeared in the media that implied it could be easy for tax payers who had missed the 31 January deadline for filing their Self Assessment tax return to get out of paying the automatic £100 minimum penalty.
According to HMRC guidelines, individuals can successfully appeal against the penalty if they have a ‘reasonable excuse’ for filing late. There is an official list of circumstances HMRC consider serious enough to be ‘reasonable’, the number one being: ‘your partner died shortly before the tax return or payment deadline’.
The news headlines appeared following the leaking of an internal HMRC memo to its staff dealing with Self Assessment penalties. Despite the automatic penalty system, around 900,000 people still failed to submit their tax return for the 2013/14 tax year before the deadline of 31 January 2015. In the weeks after the deadline, so many of the late-filers appealed against the £100 minimum penalty they received that they caused a backlog of cases in HMRC. The internal memo detailed a simplified approach to resolving penalties that could be taken; in effect, in the majority of cases, HMRC would accept the taxpayer’s grounds for appeal, without questioning the taxpayer, and cancel the penalty.
A subsequent press release from HMRC made it clear that the deadline for appealing fines for the 2013/14 tax year has now passed. The statement did not specify what approach would be taken with individuals missing the 2014/15 tax return deadline on 31 January 2016. It did say, however, that in the longer term, HMRC want to move away from sending out penalty notices as a mechanical reaction to a single missed deadline to instead focus on those who persistently fail to pay or submit their tax returns on time.
It is good news, of course, that HMRC intend to use their right to send out fixed penalty notices in a fair and proportionate way… but it is far safer to meet the deadlines in the first place.
To avoid the last-minute Self Assessment tax return rush, and any risk of filing late, please contact us in plenty of time before 31 January 2016.