HMRC Send Out Fines for Self Assessment Tax Return Failings

The deadline for the Self Assessment Tax Return online was January 31, 2013. The paperwork and all tax must be paid by this date. Every year there are adverts on TV, radio and online to warn people about the upcoming deadline and every year people tend to leave it to the last minute. I have a practise of filling my forms out as soon as I get them in July since I already have the details of my earnings from the previous year. It is now reported that HMRC are sending out about 850,000 penalty notices to people failing to meet the deadline.

Not everyone will need to fill one out. Those in employment, who receive a normal wage slip every month and have no other income will not need to fill out the paperwork. Those who are registered self-employed, have property that they earn money from or have stocks and shares will need to fill out the paperwork. This is for the previous tax year, so the paperwork filled out last month was for the tax year 2011/2012.

Those who fail to fill out the paperwork on time are liable for a £100 fine. The longer the paperwork and payment for the tax is delayed, the more this fine increases. HMRC have sent out about 850,000 notices so far to people who have failed to fill out the paperwork and pay the tax they owe. This figure has decreased from the 2010/2011 tax year, which shows that people are realising that it simply isn’t worth delaying the paperwork.

While the majority of people have no excuse, there are some who get a fine when they have a good explanation; but you have to be able to prove your explanation. A major issue that was raised in 2011 was that soldiers serving overseas who have properties that they rent out will not necessarily be able to get the paperwork in on time, especially those who have been deployed to Afghanistan. While they get the fine, as long as they can prove their deployment, they will not have to pay it.

Whether you have received a fine, or not, it is worth preventing one from happening next year. You can do this with the following steps:

• Keep track of your books throughout the year
• Record everything chronilogically
• Have a folder for your receipts and paperwork
• Fill out the self-assessment form as soon as you are sent the reminder for it or send the information to your accountant straight away
• Set your own deadline at least three months before so you are ready for any last minute hiccups

It’s clear that you will benefit from not receiving a fine but there are other ways that you will benefit by filing early. The first is that you have a clear account of the amount you earned. This helps when it comes to loan applications, any type of financing needs and claiming tax credits and other in-work benefits. It will also take the stress from searching for paperwork later in the year with just one day to go.

HMRC are set to make £85m from late tax returns. Avoid being one of them and fill out your paperwork on time. Everyone has to do it and it isn’t too difficult to do; get an accountant if you are worried about filing wrong!