Getting on the wrong side of the tax man is never a good idea, but sometimes life gets in the way and you might find yourself submitting your tax return later than the deadline. So what happens if you miss the all-important cut-off date?
There is a zero tolerance policy on tax returns, which means if you miss it even by one day, you will be fined £100. If you then miss it by up to 3 months, you will be fined an additional £100. By the time it gets to 6 months late, HMRC will estimate your Corporation Tax amount (known as a determination) and fine you a further 10% if their estimated Tax figure. This determination cannot be appealed and you must still submit your return, at which point your penalties will be calculated. This situation is far from ideal and could end up costing you a lot of your hard earned profits.
Still not submitted your return? Well, once it is 12 months past your deadline, you will then be fined a further 10% of the determination. And the bad news doesn’t end there… if you are a repeat offender, totalling 3 or more late returns, your £100 fines become a massive £500 a pop!
I missed my return deadline, but I have a good excuse…
If you have a genuine reason as to why you could not submit your tax return on time, you can appeal to your Corporation Tax office. If your reason is valid, you must ensure you file as soon as possible after the issue is resolved. The following are considered to be legitimate reasons for late filing:
- The death of a partner or close family member, just before your deadline.
- Unexpected and unavoidable stay in hospital.
- Serious illness.
- Vital software or computer failure.
- Problems with the HMRC online service that are the responsibility of HRMC and not yourself.
- Accidents or disasters such as a fire or flood at the office.
- Delays from the postal service that were out of your hands.
The dog ate my tax return…
The following however, will not be deemed as a reasonable excuse:
- Someone else let you down, saying they would submit the return on your behalf and didn’t – it is your responsibility alone.
- A failed payment or bounced cheque due to insufficient funds in your account.
- You couldn’t work out how to use the HMRC online system – postal returns are available.
- You didn’t receive a reminder.
TOP TIPS for avoiding fines
- Always submit with plenty of time before your deadline to give yourself a cushion in case of any issues.
- Keep copies, electronic and hard versions of your return to ensure you have a backup.
- If you have any questions, contact a professional, either at HMRC or an accountant.