What happens if I file my tax return late?

what happens if I submit my tax return late or file it with a mistake?

As you probably know by now, if you haven’t filed your online Self Assessment tax return yet, you have until midnight on 31st January to submit your tax return and pay your tax bill.

But what happens if you don’t do this in time, and is there anything you can do about it? Here are the details:

What happens if I don’t submit my tax return/pay by the deadline?

You get a fine, basically. If you file your return within three months of the deadline (so up to the end of April), you’ll get a penalty of £100.

If you submit your return more than three months late, you’ll have to pay more. The exact figures are no longer listed on the HMRC website but at the time of writing they are as follows:

Three months+ late: the original £100 fine plus an additional fine of £10 for each day the return remains outstanding up to a 90 day maximum of £900.

Six months+ late: the original £100 fine, the additional fine of £900 and a fine of either £300 or 5% of the tax payment due, whichever is higher.

12 months+ late: the original £100 fine, the additional £900 fine, the £300/5% of tax payment due AND another fine of £300 or 5% of the tax payment due.

If you pay your tax bill late, you’ll also be charged interest on it from the payment is due.

I’m going to miss the deadline. What should I do?

First, contact HMRC as soon as possible to make them aware of the situation. They may agree not to issue a penalty, but this is assessed on an individual basis. If it’s a case of you putting it off for no real reason you aren’t likely to get much sympathy.

Then get your tax return filed and the tax payment due paid as soon as you can. Make it your number one priority.

If you receive a penalty and have what is considered a “reasonable excuse” for filing your tax return or pay your tax bill late, you can appeal against the decision.

HMRC give the following as examples of reasonable excuses:

• your partner or another close relative died shortly before the tax return or payment deadline

• you had an unexpected stay in hospital that prevented you from dealing with your tax affairs

• you had a serious or life-threatening illness

• your computer or software failed just before or while you were preparing your online return

• service issues with HM Revenue and Customs (HMRC) online services

• a fire, flood or theft prevented you from completing your tax return

• there were postal delays that you couldn’t have predicted

• the delay related to a disability you have

HMRC will not accept the following as reasonable excuses:

• you relied on someone else to send your return and they didn’t do it

• your cheque bounced or your payment failed because you didn’t have enough money

• you found the HMRC online system too difficult to use

• you didn’t get a reminder from HMRC

• you made a mistake on your tax return

your dog ate your tax return

I've made a mistake on my tax return, will I receive a penalty?

If you think you’ve made a mistake on your Self Assessment tax return, you can change it for up to a year after the original deadline, So if you made an error on your 2015/16 tax return, you can amend it up to 31st January 2018.

After this date, you will need to write to HMRC to let them know about the mistake.

HMRC do sometimes issue a penalty for errors on tax returns, but rather than being time-based, this type of fine issued is based on behaviour. So if the mistake was due to you being careless or deliberately giving incorrect information, and you then failed to disclose this to HMRC, the penalty will be higher.

At the time of writing, this is the system HMRC uses to determine fines for errors and mistakes on tax returns:

• reasonable care – no penalty

• careless behaviour – between 0% and 30% of the amount underpaid/refund over claimed. If after prompting by HMRC, a 15% minimum applies.

• deliberate misstatement – between 20% and 70% of the amount underpaid/refund over claimed. If after prompting by HMRC, a 35% minimum applies.

• deliberate misstatement, which is then hidden – between 30% and 100% of the amount underpaid/refund over claimed. If after prompting by HMRC – 70% minimum applies.

Is there anything I can do about a penalty?

You can appeal a penalty within 30 days of the penalty notice being issued, which means that HMRC will review your case and possibly remove the fine issued.

You need to submit your tax return or notify HMRC that you don’t need to complete one before appealing a penalty. This is because HMRC use the date the return was filed and the amount of tax you owe to calculate the fine.

You can appeal against a Self Assessment penalty by completing this form and sending it to:

Self Assessment

HM Revenue and Customs 

BX9 1AS 

United Kingdom

If your fine is £100 (if you've filed your return late but within three months after deadline), you may be able to appeal the penalty you’ve been issued online.

If you’re struggling with your tax return, we can help! Email hello@easyasvat.com for more information.

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