With the deadline approaching midnight, HMRC has warned millions of people who have not yet submitted their self-assessment tax forms. Ignoring a return on time could cost a set £100 fine; those who postpone could pay more fines. Now is the time to act to prevent extra charges if you are among those still to submit their self-assessment tax return.
Should the deadline be missed, what results?
For missing the self-assessment tax return deadline, almost 3 million persons run the danger of fines. The fixed £100 penalty is applied even in cases of no tax due. Penalties, however, grow the longer the tax is still owed. Three months later, extra daily fines of £10 are applied; the maximum fine is £900. Additional penalties could be due at six months and a year, along with interest costs.
HMRC urges taxpayers to seek guidance and use online services, including the HMRC app, to complete their returns and pay any owed tax. About 8.6 million people, including small firms and people with extra income, have already paid their taxes and submitted their forms.
Under what reasonable grounds might one miss the deadline?
HMRC notes that missing the deadline could have legitimate causes that will be considered individually. Reasonable justifications cover illness needing hospitalization, bereavement, or handling life-threatening medical situations. Sometimes permissible causes for a delay are software failures, personal computer problems, or document destruction resulting from fire, water, or theft.
“If you know you are liable to complete the return and have no “reasonable excuse,” you can choose to make a tax payment even without submitting your return to avoid the interest charge,” said Benedicta Egbeme, an accountant and BeniRatio Finances founder. “You can submit your return as soon as possible; any overpayments will eventually be refunded.”
How Can You Steer Clear of Penalties?
HMRC urges taxpayers to file their returns as soon as possible to prevent more interest costs and, if necessary, pay an estimated sum. Egbeme said, “Any shortfall will need to be paid; overpayments will be refunded.”
Taxpayers who missed the deadline but feel they have a good excuse can contest the penalties. They can appeal either by writing to HMRC or using an online form. However, HMRC will only take appeals after the tax return and payment have been submitted.
What New Guidelines Apply to Online Sales?
New rules now mandate that anyone selling more than thirty things on sites like eBay, Vinted, and others forward their sales information to HMRC. These records will be checked against their tax returns to guarantee compliance. Those making more than £1,700 in sales must also complete a self-assessment tax return.
Egbeme claims that persons running side enterprises like babysitting or renting out a room on websites like Airbnb must file a self-assessment tax return should their self-employment revenue exceed £1,000.
How Can One Avoid Scams?
HMRC has also warned about the danger of scams, particularly near tax deadlines. Taxpayers are advised to exercise caution and never share their HMRC login information with anybody. To ensure the safety of personal data, one must identify and document any unusual correspondence.
What Information Should You Know Regarding the Self-Assessment Method?
People who earn self-employment income over £1,000, income from side projects or hobbies, and rental income over £7,500 must file a self-assessment tax return. Those residing abroad but earning in the UK or those with foreign income must also file a self-assessment tax return.
Egbeme stressed, “Tax can be scary, but people should not bury their heads in the sand.” “The key is to address the complexity and daunting UK tax system head-on to avoid penalties.”