Dec 6 2023

What to do if you miss a tax return deadline

Self Assessment tax returns are one of the main ways HMRC uses to collect income tax. Completing a self assessment tax return is a legal requirement for many individuals in the UK. Although the deadline for submitting the tax is usually the 31st January following the end of the tax year, a percentage of those required to submit, still end up missing it. Whatever your reasons for missing the tax return deadline, HMRC will initially issue a penalty for any late tax returns.

In this blog, we will be breaking down what to do in the event you miss a tax return deadline, including how to appeal.

Who has to send tax returns?

Many people throughout the UK are legally required to fill out and submit Self Assessment tax returns. It applies to anyone who, in the course of the previous tax year, was:

A partner in a business partnership.
Self-employed as a sole trader who earned more than £1,000 (this value is before deductions due to tax relief claims).
Someone with a total taxable income exceeding £100,000.
An individual who had to pay the High Income Child Benefit Charge.

A tax return is also required if someone has any untaxed income. This includes:

Rent collections
Tips and commissions
Savings
Investments
Dividends
Foreign income

Beyond these binding reasons, it may be beneficial for you to submit a tax return. Firstly, it can be a straightforward way to prove your self-employment status and allow you to claim statutory benefits such as Maternity Allowance and Tax-Free Childcare. Secondly, tax returns can be used to claim certain income tax reliefs.

Deadlines for Self-Assessment tax returns

Once you have registered for Self-Assessment, you are required to submit your Self-Assessment tax return to HMRC before the deadline of 31^st January after the end of the tax year (or three months after the date of issue to file if issued after 31^st October).

Filing for a tax return can be done online by signing into the government portal using your Government Gateway user ID and password. However, this has the potential to be a long and arduous process as the government doesn’t update their technology very often. In contrast, a chartered accountancy firm has bespoke tax software for submitting tax returns. Note that you also won’t be able to submit your return this way if you fall into one of the following categories:

You lived abroad as a non-resident during the tax year.
The tax return is for a partnership.
You receive income from a trust.
You are a religious minister.
The tax return is for an estate or trust.
You are an underwriter for Lloyds.

Many self-employed workers, sole traders and business owners use commercial software to help them organise their accounts and in some case this software can be used to prepare and submit your tax return

Experienced accountants such as us use bespoke taxation software to ensure your tax return is submitted accurately and on time, every time.

Registering for Self Assessment

If you haven’t submitted a tax return before, you need to register for Self Assessment. This is a relatively quick and simple process that can be done on the GOV.uk website. After this, you must keep records of any business income and expenditure so you or your accountant can fill in the tax return correctly.

HMRC self assessment penalties

Any individual that meets the Self Assessment requirements and hasn’t submitted a tax return by the deadline, will be subject to a penalty.

1 day late – £100 penalty.
3 months – a possible additional penalty of £10 per day (to a maximum of 90 days).
6 months – a further penalty of £300 or 5% of the tax owed may have to be paid. Whichever value is greater will apply.
12 months – another penalty of £300 or 5% of tax owed, whichever value proves to be higher. However, some cases have led to an additional charge of 100% of the tax owed.

The severity of the penalty for missing the deadline will therefore vary depending on how long after the deadline it is before the return is submitted. It can also be influenced by other factors. The bottom line is to avoid missing a tax return deadline altogether. The best way to do this is to enlist a Chartered Accountant to oversee the preparation and filing of your tax return and ensure your statutory requirements are being met.

In addition to penalties for late filing, there are separate penalties associated with late payment. These also scale depending on the how late the payment is.

30 days — you must pay 5% of the tax you owe at that date.
6 months — you must pay a further penalty of 5% of the tax you owe at that date.
12 months — you’ll have to pay a further penalty of 5% of the tax you owe at that date.

What to do if you miss a deadline

Ideally, you or your accountant will have the tax return completed and submitted well before the deadline. Remember though, even if you use outsourced accountancy services for the filing of your tax returns, you are still responsible for meeting the deadline. This will result in any of the penalties listed above.

The first thing to do if you miss the deadline is to submit your tax return. Even though it’s late, this prevents your penalties from increasing. Crucially though, don’t panic and rush to complete it as any mistakes could lead to delays and further financial loss. Through providing services such as tax investigation insurance, our specialist accountants are well equipped to protect your business’s finances.

Only once you have filed a tax return, even if it’s late, can you appeal any penalties due to lateness. You typically have 30 days from the penalty notice date to make an appeal. This can be if you believe you have a valid reason for being delayed, or because you weren’t required to submit a Self Assessment tax return in the first place. Valid excuses for missing a tax return deadline include:

You experienced delays due to a life-threatening illness, disability, or mental illness.
A loved one passed away close to the deadline date.
You had to unexpectedly stay in hospital for a period of time, which prevented you from filing the tax return.
HMRC’s online services were experiencing technical issues.
You were prevented from filing due to a fire, theft, flood, or other natural disaster.

Trusted tax accountants

Looking for an accountant for taxes near me? Jan McDermott Chartered Accountants is always efficient and professional in the statutory services we provide for businesses. To this end, we are experienced at completing and submitting Self Assessment tax returns far ahead of their relevant deadlines. As Chartered Accountants in Wirral, we understand the stresses that come with keeping records for tax returns, especially if you’re self-employed. Don’t hesitate to speak to a member of our team and we can help take the load of tax compliance off your shoulders.