Late income tax returns, errors and mistakes – what will they cost you?

Late income tax returns, errors and mistakes – what will they cost you?
tax returns

If you are wondering “What happens if you submit and pay your tax return late?”, we’ve detailed all the information you need here…

What happens if you’re late filing your income tax return?

If you miss the due date to submit your self-assessment tax return, HMRC might immediately charge you ₤100. HMRC needs to have your income tax return by 31 October 2020 for paper forms, and twelve o’clock at night on 31 January 2021 for internet returns. Generally, if you’re greater than a day late, the possible penalties only become worse! Fines for late income tax return are:

  • 1 day late = £100 for one day after deadline
  • Up to 3 months late = £10 for each additional day (capped at 90 days), plus £100 initial fine – maximum of £1,000
  • 6 months late = Either £300 or 5% of the tax due (whichever is higher), on top of the penalties above
  • 12 months late = An additional £300 fine, or 5% of the tax due, plus the above penalties. In the most serious cases, you may be fined 100% of the tax due

If you belong to a company partnership, note that all partners can be charged if a collaboration tax return is filed late.

What are the consequences of paying your tax late?

You could also face the following penalties if you pay late:

  • After 30 days: a charge equal to 5% of the tax outstanding
  • After six months (31 July): a further 5%
  • After 12 months (31 January the following year): an additional 5%.

If your paper income tax return is going to be late:

If you were preparing to submit a paper income tax return, but were worried it may not get to HMRC by the 31 October due date, don’t send it off late. If you do, you’ll incur the fines described above. Instead, you can complete an on-line tax return, by the due date of 31 January the following year. 

Charges for making an error on your tax return:

There is a system of penalties for mistakes on your income tax return. What you’re charged with will certainly depend upon whether HMRC thinks you have just been careless, or have actually intentionally tried to alter how much you earn. Penalties are based on the quantity of tax you owe, and also are payable along with the tax obligation owed. If you have actually been careless, the fine will certainly be in between 0% and 30% of the extra tax obligation owing. If you have actually purposely undervalued your tax obligation, the fine is in between 20% and also 70%. If you have intentionally ignored your tax and also tried to conceal a fact, the penalty will be between 30% and 100%.

Remedying errors on your tax return:

If you know you made a mistake, you can remedy your tax return for up to a year after the deadline by means of the HMRC online site or through your software application provider. You’ll need to write to HMRC to clarify the detials and also request a change. For paper income tax return, you’ll require to download and submit a brand-new return and mail it to HMRC with ‘Changed’ noted on each corrected page.

How to find help:

If you’re still puzzled about your tax return, there’s assistance available there. HMRC has an in-depth guide <<Exactly how to fill out your Tax Return (SA150)>>, with section-by-section notes on what you need to report, and also exactly how to do it. Elsewhere, there are a variety of worksheets for more specific subjects like pension plan tax charges and trainee funding reductions. Taxpayers can also get assistance HMRC by calling the Self-Assessment Helpline (0845 900 0444), it is open 7 days a week, from 8am to 8pm. If you’re having troubles filling out your return online due to a technical problem, call the Online Solutions Helpdesk (0845 605 5999) they are open Monday to Saturday from 8am to 8pm. If you are struggling to pay your tax bill, you can contact HMRC’s Repayment Helpline on 0845 366 1204 for guidance – Good Luck, and don’t delay, time is ticking away.