What happens if I miss the self-assessment deadline? How much does HMRC charge late tax returns, can I appeal

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Millions of people across the UK have to file a return with HM Revenue and Customs and pay their taxes by midnight tonight

For millions of people across the UK, today (Tuesday 31 January) is the deadline for filing self-assessment tax returns with HM Revenue and Customs (HMRC).

While it’s likely to be one of the jobs on your to-do list that is the least fun, and therefore, one you’re tempted to put off, you have to get it done. Failure to do so will put you in a lot of hot water with the tax authorities, with fines starting at £100 if you fail to file and then pay your bill by this date.

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HMRC figures from 26 January showed 2.7 million people had yet to file their self-assessment tax return out of an estimated 12 million eligible taxpayers. While this was 700,000 fewer people than at the same time last year, it is still a large number of taxpayers.

NationalWorld has seen evidence of dozens of people attempting to phone HMRC today to get help with filing their returns and paying their tax bill ahead of the midnight deadline. However, many have reported being cut off after ringing the HMRC number.

HMRC told NationalWorld that today is the busiest day of the year for its self-assessment helpline. It said it is “answering calls as quickly as we can” and urged people “to use our improved digital services”.

So, what happens if you’re late filing your self-assessment tax return - and is there an appeals process?

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You have to file a self-assessment tax return if you’re self-employed (image: Adobe)You have to file a self-assessment tax return if you’re self-employed (image: Adobe)
You have to file a self-assessment tax return if you’re self-employed (image: Adobe) | ink drop - stock.adobe.com

What is a self-assessment tax return?

A self-assessment tax return is essentially a record of all of your taxable income which you then send to HMRC so that they can work out your final income tax bill.

If you’re a worker employed by a company, your tax will be sorted out automatically. But if you are self-employed, or have substantial amounts of income coming in from work outside of your main job, you have to fill a tax return in.

To fill out a return, you have to have records of your earnings (e.g. invoices) and receipts for anything you want to claim tax relief on (like, utility bills related to your work). You can employ someone to handle your taxes, but it’s unlikely to be an option for people who are not high earners.

HMRC does offer help and advice for people filling out their own tax returns. It has a webpage containing videos and webinars on how to do it, as well as a general enquiries service (although this might be very busy today).

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Who has to do a self-assessment tax return?

You must send a tax return if, in the 2021/22 financial year (6 April 2021 to 5 April 2022), any of the following applied:

  • You were self-employed as a ‘sole trader’ (i.e. you own your own business) and earned more than £1,000 (before taking off anything you can claim back through tax relief)
  • You were a partner in a business partnership
  • You earned £100,000 plus

You may also need to send a tax return if you have any income that hasn’t been taxed, including:

  • Some Covid-19 grant or support payments
  • Money you gain from renting out a property
  • Tips and commission
  • Income from savings, investments and dividends (i.e. capital gains)
  • Foreign income

If you fit into any of these groups and you haven’t registered to file an online self-assessment tax return, you are already too late. HMRC has previously told people to allow up to 20 working days for the registration process to complete.

What happens if you’re late filing your tax return?

If you’re late in getting your tax return across to HMRC, you will have to pay a penalty - even if you’re not due to pay any tax.

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Filing your return after 31 January will incur an immediate £100 fixed penalty. Late payment and/or filing delays of more than three months will incur a larger penalty fee. Late payments may also incur interest on what you have to pay back.

HMRC accepts several ‘reasonable’ excuses if you file to pay your tax return on time (image: Adobe)HMRC accepts several ‘reasonable’ excuses if you file to pay your tax return on time (image: Adobe)
HMRC accepts several ‘reasonable’ excuses if you file to pay your tax return on time (image: Adobe) | RTimages - stock.adobe.com

Should you fail to get in contact with HMRC about not filing your tax return or not paying on time, they may employ bailiffs to seize your property, or even take you to court. But people who are unable to pay what they owe in full on 31 January may be able to set up a payment plan, allowing them to spread the cost of their tax bill into monthly instalments.

If you are paying your tax bill today, it may take 72 hours to go through. But HMRC has said it will treat these payments as having been made on 31 January rather than after the deadline, so you will not face a penalty.

HMRC has also said it will be lenient to those with genuine excuses for failing to file their tax return or pay their bill by midnight on 31 January.

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Can you appeal against an HMRC penalty?

If you have a reasonable excuse for paying or filing your return late, you can ask HMRC to review your case. You can also refer the matter to a tax tribunal, although it’s worth trying to sort it out directly with HMRC first.

Starting this process will delay the due date for any penalty payment you’ve received. HMRC reviews generally take around 45 days to complete.

The deadline for postal self-assessment tax returns was in October 2022 (image: PA)The deadline for postal self-assessment tax returns was in October 2022 (image: PA)
The deadline for postal self-assessment tax returns was in October 2022 (image: PA) | PA

There are several excuses the tax authority will accept that will mean you avoid having to pay a fine. In essence, you will have to demonstrate that you took “reasonable care” to meet your tax obligations, but that something stopped you from filing or paying on time. Here are the kinds of events HMRC will accept as a reasonable excuse:

  • Family bereavement close to the deadline
  • Unexpected time in hospital in the lead up to the deadline or a serious or life-threatening illness (such as Covid)
  • Your computer or smartphone died just before or while you were putting your online return together
  • HMRC online service disruption (e.g. website outages) - it’s unclear whether this includes disruption on its phone lines
  • Fire, flooding or theft
  • Postal delays that you could not have foreseen
  • Delays related to a disability or mental illness you have
  • You were completely unaware of or misunderstood your legal obligation to file and pay your taxes
  • You relied on someone else to complete and file your return, and they failed to do so

Say your reasonable excuse is accepted, you will then have to file your return or pay your tax bill as soon as possible.

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