Escaping Penalties for Late Tax Returns
Newsletter issue - February 08.
The deadline for submitting personal tax returns for 2006/07 has just passed, and in a few days time the Taxman's computer will be churning out £100 penalties for late returns. If you get one of those unpleasant letters don't panic, or rage, as the penalty may not be due at all.
For example...
- If your tax return was issued to you after 31 October 2007, perhaps because this the first tax return you have been asked to complete for several years, you have three months in which to complete it. So the submission deadline for your particular tax return will be later than 31 January 2008. This applies irrespective of what it says on the front page of the return form, which will still refer to the 31 January deadline.
- The late filing penalty cannot exceed the tax and NIC outstanding on 31 January. If you have paid all the tax and NI due in advance of 31 January 2008, or a repayment is due, the penalty should be reduced to nil.
- If you have a reasonable excuse for not filing your tax return on time you may escape the penalty. However, you will have to file your return as soon as those conditions that prevented you from filing come to an end. It is also pretty difficult to find a circumstance that is accepted by the Taxman as a reasonable excuse. None of the following excuses are accepted:
- didn't realise a tax return was required
- the tax return form is too difficult
- tax affairs are complicated
- pressure of work
- failure by your accountant!
- delays in the post
- insufficient records.
