As I am sure most people are aware, January 31, 2019, is the online filing deadline for tax returns for the year ended April 5, 2018, writes Pearson May partner Matthew Rutter BSc (Hons) FCA CTA.
If you are within the self-assessment regime and therefore required to file a tax return for 2017/18, then time is running out and to avoid automatic penalties you must file your return before the end of the month.
If HM Revenue and Customs (HMRC) sent you a notice to complete a tax return shortly after April 5, 2018, and you don’t file the return before January 31, 2019, there will be an automatic penalty of £100 that you will have to pay even if there is no tax payable or if you have already paid all of the tax that you think you might owe.
In some circumstances you may have slightly longer within which to file your tax return. If, for example, HM Revenue and Customs has recently issued you with a notice to complete a 2017/18 tax return then you usually have three months after the date of such notice within which to prepare and file your return.
As well as the automatic £100 late-filing penalty, if the tax liability due on January 31, 2019 is not fully paid by that date, HMRC will charge interest (and such interest will also be levied on any payment on account toward your 2018/19 tax liability if that applies to you). That interest will be charged at 3.25% per annum and it is worth noting that any tax in respect of the year ended April 5, 2018, which remains unpaid at March 2, 2019, will incur a further 5% surcharge.
Furthermore, if your tax return is due to be submitted by January 31, 2019, and is still not submitted by April 30, 2019, then even more significant penalties are levied at the rate of £10 per day (up to a maximum of £900).
There are further penalties levied if the return is more than six months late (£300 or 5% of the tax due, whichever is the higher, in addition to the penalties mentioned above) and if the return is more than 12 months late (an additional £300 or 5% of the tax due, whichever is the higher, and in serious cases can be as much as 100% of the tax due). Similar surcharges of 5% are also applied to late payment of tax if the tax remains unpaid after six months and 12 months in addition to the 5% surcharge if the tax is not paid by March 2, 2019.
As I am sure you will appreciate, because of the potentially significant penalties referred to above, it is much better to try to file your tax return well in advance of the January 31 deadline but if you are not able to do so then you should still try to file your return as soon as possible after this date to minimise any additional interest and penalties accruing. Please contact us if you would like any assistance with bringing your tax affairs up to date or if there is anything else you would like to discuss.
It is also worth pointing out that late submission of your tax return can have other, maybe less immediate, financial implications which can include invalidating any insurance policy which you may have in place for professional fees arising on any tax inquiry that HMRC may undertake in respect of your tax affairs. You may therefore want to read the small print of any such insurance policies very carefully.
As many people are filing their tax returns around this time of year, fraudsters can try to take advantage of this by attempting to contact taxpayers asking them to disclose personal information about their tax affairs or bank details, etc.
We covered this in more detail in our article a few months ago but one of the most common such scams in the past few years takes the form of a bogus email purporting to have been sent from HMRC informing taxpayers that they are entitled to a tax repayment. The emails often ask taxpayers to then click on a link in the email or to provide their bank details so that the repayment can be made.
It is not uncommon for taxpayers to be entitled to tax refunds at this time of year if, for example, they have recently filed their tax return which indicates they have overpaid tax in respect of the year ended April 5, 2018. However, HMRC will never contact taxpayers by email about such refunds, so be very cautious about any email correspondence you receive which appears to have been sent by HMRC.
If you are unsure about the content of any emails then it is safer to not click on any links in the email, open any attachments or reply with any confidential information. You can also forward any suspicious emails to HMRC at phishing@hmrc.gsi.gov.uk or send any suspicious text messages to 60599. You can also contact HMRC on their general inquiries phone number 0300 200 3300. There is further information available online at www.gov.uk/money/phishing-scams
The above is for general guidance only and no action should be taken without obtaining specific advice.
