The Tax Advice Network is warning taxpayers that they will need a ‘reasonable excuse’ to avoid penalties and interest charges if they missed the 31st January filing deadline for personal self-assessment tax returns.
You are legally obliged to file a tax return if you received an official notice to complete one. You are also obliged to tell the taxman if you had any untaxed income or capital gains that are subject to tax. The deadline of 31st January 2017 was the filing deadline for tax returns in respect of the tax year that started on 6 April 2015 and ended on 5 April 2016. If you have had untaxed income or capital gains since then you will need to report these on a tax return for the current tax year that ends on 5 April 2017.
The minimum penalty for filing late is £100 even if you do not have to pay any tax. The penalties increase over time and interest will be charged on any late paid tax.
Chairman of the Network, Mark Lee, explains that “Whatever your reason for missing the deadline, the taxman’s computer will charge the penalty and you will need to pay this unless HMRC later accept that you have a ‘reasonable excuse’. HMRC are known to have very strict rules as to what they will accept is ‘reasonable’ in this context.”
HMRC’s guidance means they do not accept the following excuses for late filed tax returns:
- you found the HMRC online system too difficult to use or you left it to the last minute and couldn’t quite work it all out under pressure
- you didn’t get a reminder from HMRC
- you made a mistake on your tax return which means you need to correct things after the filing deadline
Excuses that ‘may’ be accepted tend only to be where something outside of your control prevented you from filing ahead of the deadline. For example:
- 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
- you had provable service issues with HMRC’s online services
- a fire, flood or theft prevented you from completing your tax return
Mark Lee warns that before accepting your excuse, “HMRC will require two things:
1 – Proof or evidence that your excuse is true and not made up. This might include confirmation from doctors or hospitals re medical issues, and technical reports from IT consultants re computer issues.
2 – Proof or evidence that you made every effort to file your tax return asap after the deadline.”
What to do now?
Whether or not you have a ‘reasonable excuse’, you should aim to file your tax return as soon as you can.
If you need help and can afford to pay for any accountant or tax adviser to help you, you can choose from any of the 100 members of the Tax Advice Network – which is spread across the UK. Members of the Network can also advise you as to the merits of your ‘excuse’ and give you advice to ensure that you don’t pay too much tax. Simply use the search facility on the home page here >>>
Alternatively if you do not want to pay for help and advice you can talk to HMRC by calling their Self Assessment Helpline on 0300 200 3310 (open 8am-8pm Monday to Friday and 8am-4pm Saturdays). Make sure you have your Unique Taxpayer Reference (UTR) number to hand.