The deadline for getting your 2012/13 tax return to HMRC, and paying any tax due, is 31 January. If you miss it, you will incur a £100 penalty and further financial penalties if you don't act quickly.
HMRC overhauled the penalty regime in 2009, ranking up the amounts and leaving taxpayers in little doubt as to where they stand: file and pay late and you'll be left out of pocket.
The penalties are summarised below.
|30 Days||5% of the tax owed at that date.|
|3 Months||£10 for each following day up to a maximum of £900|
|6 Months||The greater of £300 and 5% of the tax due||5% of the tax owed at that date.|
|12 Months||The greater of £300 and 5% of the tax due. In serious caes, you may have to pay up to 100% of the tax due||5% of the tax owed at that date.|
As each penalty is on top of the penalties imposed before, it is easy to see how some taxpayers end up in debt to HMRC for significant amounts. This is illustrated by the example below.
Guy submitted his 2012/13 tax return and paid the tax due (£500) on 30 August 2014 (i.e. 7 months after the due date of 31 January 2014). In so doing, he incurred the following penalties:
|01/02/2014||100||Tax Return 1 day late|
|02/03/2014||25||Tax 30 days late|
|01/05/2014 - 29/07/2014||900||Tax Return 3 months late|
|31/07/2014||300||Tax Return 6 months late|
|31/07/2014||25||Tax 6 months late|
In total, Guy owes HMRC £1,350 in penalties, almost 3 times the amount of tax due for the year. And that's before we calculate the interest, on the tax and on the penalties!
The moral of the story is clear - if you haven't already done so, get your tax affairs in order now. Call our tax team on 0191 653 1022