HMRC has issued a 12-day warning over the prospect of £100 fines for failing to log your self-assessment tax returns. The Labour Party government’s taxman and tax department has warned the deadline for submitting a tax return is January 31.
Last week, HMRC said there were still 5.4million people who had yet to file their self-assessment tax return. “Filing on time is absolutely critical if you want to avoid being hit with a penalty,” Paul Falvey, tax partner at BDO, said. Initial fines are £100 but if you fail to do so for more than three months, the fine will begin to increase by £10 per day up to a maximum penalty of £900.
“If you owe tax and are even later in filing, the penalty costs start to mount up quickly,” Falvey said. At the six-month mark HMRC will begin charging a further penalty of the greater of five per cent or £300 and at 12 months, they will add a further five per cent or £300.
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On top of this, HMRC may charge late payment interest at 7.25 per cent, which will increase to 8.75 per cent from April this year. Seb Maley, chief executive of Qdos, said: “What’s more, unfiled, late or incorrect tax returns can increase the likelihood of being investigated by HMRC. Doing everything you can to meet this month’s deadline and submit an accurate tax return is vital.”
So, who needs to return? Taxpayers must submit a return if you were self-employed and made more than £1,000, if you were a partner in a business partnership, had a total income above £150,000, had a capital gains tax liability or had to pay the high-income child benefit charge.
You will also need to file a return if you made untaxed income from renting out a property; commission; income from savings and investments above a certain level; or foreign income.