02 Dec Don’t let Christmas becoming taxing
To avoid headaches over Christmas and hefty penalties in the New Year, taxpayers should complete their tax returns ahead of Christmas.
HMRC predicts around 11 million people will be required to submit a return for the 2015/16 tax year (6th April 2015 to 5th April 2016). If they’re still outstanding, these tax returns need to be filed electronically by 31st January 2017 to avoid an automatic filing penalty being issued.
Therefore, the sooner you complete your tax return, the less stressful your Christmas will be. Forward planning will also reduce the risk of making any costly mistakes or having to make corrections to your tax return at a later date.
The busiest day for the last tax year was 29th January 2016, with 513,271 returns completed – more than 21,386 returns received per hour. The busiest time was between 2pm and 3pm, with 50,358 returns being submitted– 14 per second.
It’s wise, therefore, not to leave your return until the last day, as HMRC’s website and call centres will be busier than Santa’s toy workshop on Christmas Eve.
And if a busy website and being at the back of a phone queue aren’t incentive enough, remember that filing your returns late will result in you paying penalties. A late tax return is currently subject to the following penalty regime:
- An initial £100 penalty, which will apply even if there is less than £100 tax to pay or the tax due is paid on time
- 3 months: Additional daily penalties of £10 per day – up to a maximum of £900
- 6 months: A further penalty of 5% of the tax due or £300 – whichever is greater
- 12 months: Another 5% of the tax due or £300 – whichever is greater
- In the most severe cases, the penalty after 12 months can be up to 100% of the tax due
These penalties are in addition to one another, so a self-assessment tax return filed a year late would face penalties of at least £1,600 – or even more, depending on the level of tax due.
There are also additional penalties for late registration with HMRC and late payment of tax, with the latter also incurring interest.
Let us help
Although HMRC’s online filing system for tax returns will calculate your tax liability for you, it will not check whether your figures are accurate or that you have claimed your full entitlement to expenses and allowances.
This post is necessarily brief and is for general guidance only and does not constitute advice. You should always ask for specific advice based upon your own circumstances.