While many of us are just settling back into the post-holiday working routine, there’s a major deadline that the self-employed and contractors cannot afford to miss.
According to the HMRC, while more than 11.7m taxpayers submitted their tax returns before the January 2023 deadline, over 600,000 failed to file in time, generating consequential penalties.
With just a little foresight and support, it’s easy to take the terror out of tax deadlines – let’s explore the pitfalls, pretexts and potential for peace of mind, every time.
Unbelievable Excuses (That Never Work)
“The dog ate my homework” and similar will get rightfully short shrift. However, that never seems to stop hardy triers each year, as these excuses, shared as a warning (and with utter disbelief) by HMRC, illustrate:
- My mother-in-law is a witch and put a curse on me
- I’m too short to reach the post box
- I was just too busy – my first maid left, my second maid stole from me, and my third maid was very slow to learn
- My boiler had broken and my fingers were too cold to type
Rather than putting this much effort into thinking up creative excuses, wouldn’t putting in place easy solutions to ensure your paperwork is submitted in time pay you back tenfold in financial savings and peace of mind?
Laugh-Out-Loud Expenses (Which Also Never Work)
It might be a busy time of year for HMRC officials, but don’t think that means your expenses won’t be subject to rigorous scrutiny. As well as unbelievable excuses, every year they receive, spot and reject highly dubious expenses claims, including:
- £900 for a 55-inch TV and sound bar to help price jobs- from a carpenter
- £40 on extra woolly underwear, for 5 years
- £756 for pet dog insurance
- A music subscription, to listen to music while working
What Is The Self-Assessment Tax Deadline for 2024?
Anyone registered for self-assessment must submit online paperwork and pay the tax due for the last complete financial year (6 April 2022 – 5 April 2023) by midnight on 31 January 2024. The deadline for registering for self-assessment for the first time was 5 October 2023.
Submitting a paper tax return? The deadline for submitting a paper tax return was 31 October 2023.
In some circumstances, there is a second payment deadline of 31 July. This is for people with an agreement to make advance payments towards their bill (“payments on account”).
Sadly, one reason some people default is fear to ask for help when things go awry. While a big, intimidating organisation, HMRC is staffed by humans, who appreciate that from time to time life can throw a spanner in the works. They will treat genuine reasons with compassion and give longer time to file or pay.
What Penalties Could I Face?
Penalties for late tax return paperwork are:
- An initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax is paid on time
- After 3 months, additional daily penalties of £10 per day, up to a maximum of £900
- After 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
- After 12 months, another 5% or £300 charge, whichever is greater
Penalties for late payment of tax are:
- 5% of the tax unpaid at 30 days
- A further 5% at 6 months
- A further 5% at 12 months
When margins are tight, such penalties could be seriously bad for your business health.
Making Self-Assessment Stress-Free
25,769 tax returns were filed over the recent festive season, with a record 4,757 submitted on Christmas Day itself! This shows the pressure people can find themselves under as the deadline looms.
You’re not on your own, and as we’ve shown, the important thing is not to bury your head in the sand. As HMRC say: “Help will always be provided for those who have a genuine reason for not submitting their return on time, and the earlier we’re contacted, the more we can help.”
To avoid future stress, consider passing your self-assessment to the experts, freeing you to concentrate on your business. An accredited accountant will create a bespoke package to meet all your company and personal tax returns (plus other headaches like including VAT returns, payroll services and annual accounts if required), for significantly less than HMRC penalties.
Can we help you? Amongst other benefits, all ICS Accounting packages include self-assessment tax returns. Click to see what else is included for our Business Accounting and Contractor Accounting packages.
Prefer to speak to someone? Chat to us online, call us on 01524 580720, or email info@icsuk.com.
