Automatic Tax Penalties

You did, of course, submit your self-assessment tax return before end of January. But even with the deadline extended to 2 February this year, the revenue’s coffers are to be boosted by around £85 million from the automatic penalties levied on the 850,000 people who didn’t. Even those registered as self-employed but with no tax payment due should have submitted a return, and will be fined £100 if they didn’t. Penalty notices are being sent out right now.

Reasonable Excuses

Of course some of them will have been unable to do so for acceptable reasons. They might have been incapacitated by a serious illness. They might have been unable to focus on business or admin because of the demise of a loved one, classed as a family bereavement. These will probably be accepted by HMRC as a legitimate excuse for not filing on time.

If someone had a serious problem with a computer or internet connection, that might also be accepted. Or if there was a failure of the HMRC system, it would be recognised as not the fault of the person trying to submit.

Excuses that are not acceptable include claiming an inability to deal with the complications of the HMRC system online, or that an agent who was supposed to do it proved unreliable. The responsibility for submission lies with the individual concerned and no one can pass the buck.

Advice for the Late Filers

If you know anyone in that position, do advise them not to delay any longer. If they haven’t yet filed their return on line, the longer they wait to do so, the worse the penalties can get. From May 4th, it will cost them an extra £10 a day. Even a reasonable excuse can only be temporary, unless an illness is terminal. Life goes on beyond grieving, and unfortunately, tax affairs still need sorting out.

Advice for Those with Penalty Notices

If they think they have a reasonable excuse, they need to appeal in writing in to HMRC, making sure it will get to them by March 31st. This is the cut-off point, after which appeals will not even be considered.

Some people will have deregistered as self-employed and/or received a notice saying they are not required to complete a self-assessment return. Hopefully they will have kept the correspondence, so they can contact the revenue with their proof.

Your advice might also include a recommendation to find some reputable bookkeepers, who would never have let this happen in the first place.

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