January blues, tube strike or Brexit are not "reasonable excuses" to have missed your tax return payment

3 February 2017

If you missed the 31 January deadline to submit your self-assessment tax return and pay any liability, but do not have a valid excuse, act now to avoid facing further penalties.

Tax returns not filed by 31 January will be subject to a £100 penalty unless the individual has a “reasonable excuse”.

Plus, interest will be running on any underpaid tax at HMRC’s rate of 2.75%, and will do so until payment is made.


“Don’t bury your head in the sand”

Paul Haywood-Schiefer, assistant manager at accountants Blick Rothenberg, says:  “People shouldn’t bury their heads in the sand and think the problem will go away. It will only get worse, as penalties will be levied and eventually HMRC will take action to collect these and any tax owing.”

A reasonable excuse is not specifically defined by law and an HMRC officer would look at each case, but some valid excuses include such things as a recent bereavement of a close relative, being in hospital, a life threating illness, a fire or flood or problems with HMRC’s online services.

Mr Haywood-Schiefer says: “What wouldn’t be classed as a reasonable excuse is if you forgot, you were relying on someone else to do it, you didn’t get a reminder from HMRC or you thought the deadline was another date. The same principle applies if you try to blame the January blues, the tube strikes or even Brexit!”


Penalties can be as much as 100% of the tax due

If by 2 March 2017 there is still an outstanding liability, a 5% surcharge will apply. Further 5% surcharges will apply six and 12 months from the original deadline if the tax is still due.

As well as the penalties for late payment, if the return is still not submitted three months from the due date, then £10 daily penalties will accrue. Further penalties arise on six and 12 months late, so it is important for people to bring their tax affairs up to date as soon as possible so as not to incur unnecessary penalties, which can be as much as 100% of the tax due.

Blick Rothernberg gives the example of Silvia, who should have paid £8,000 of tax for the year ending on 5 April 2016, but missed the deadline. If she continues to ignore it, she could end up facing more than £3,000 or even 100% of the tax due in fines and interest.
If you haven’t filed because you can’t pay the tax owed, speak to HMRC to see if it can arrange a time to pay plan. The telephone number to call is 0300 200 3822.

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