For thousands of self-employed business owners the tax man's deadline is looming. By January 31, the forms need to be complete and with HMRC for the 2015-16 tax year.
Whether you are self-employed, or if you received £2,500 or more in rental income or if your savings or investment income was £10,000 or more before tax, you will also need to fill out a tax return.
And the dog ate my tax return is just not going to wash with the Her Majesty's Revenue and Customs.
Last year 870,000 people missed the deadline for their tax return and it certainly did not go unnoticed.
Penalties for failure to file on time are automatic and fixed.
There is an initial penalty of £100 and after three months, a further £10 per day is charged for up to the next 90 days.
Then after six months the penalty rises even further to include 5 per cent of the underlying tax due - and it doesn't stop there.
So the experts from DAS Legal Expenses Insurance have put together a list of top tips – including the excuses HMRC will and won't accept to help you on your way.
- HMRC says that a reasonable excuse for missing the deadline is 'normally something unexpected or outside your control that stopped you meeting a tax obligation'. Examples include the recent death of a partner, an unexpected stay in hospital, computer failures, service issues with the tax authority's online services, a fire that prevented the completion of a tax return or postal delays.
- Excuses that HMRC will not accept include: you relied on someone else to send your return and they didn't; you found HMRC's online system too difficult to use; you didn't get a reminder from HMRC.
- If you have a disability and claim to have a reasonable excuse that prevented you from meeting a deadline, HMRC will consider whether you made a reasonable effort to file on time.
- HMRC will cancel a penalty for late filing in cases where the taxpayer can show that there was a reasonable excuse for failing to file on time. However, that excuse needs to have prevented the taxpayer from filing a return over the whole period – in other words, it must have applied continuously. For example, your case will be considerably weakened if you have actually worked and received taxable income during the period of the delay. HMRC might well argue that, if you were well enough to work, you were well enough to complete your tax return.
- If you are still waiting for information to complete a return, it is entirely legitimate to make a reasonable estimate of the income or gain and then amend the return when the information becomes available. There is no penalty for amending a return, though there is a time limit for doing so.
- Taxpayers have the right of appeal in respect of penalties charged and have the opportunity to argue the case in front of a tax tribunal.
Source: LChruchill - Bristol Post