As you’ll no doubt be aware, last Sunday marked the deadline to complete your online self-assessment tax return.
While it was a record year for submissions, with 10.39 million tax returns sent to HMRC on time, 870,000 taxpayers missed the boat and are now facing an automatic penalty.
If you were one of those people, you might be wondering what to do next. Don’t worry though, help is at hand. Here’s what your next steps should be.
Try not to panic
While the prospect of £100 fine isn’t appealing, it’s important not to bury your head in the sand. The best thing to do is submit your return as soon as possible, as the penalties will soon mount up if you’re not careful.
If your tax return is three months late, you’ll start incurring a daily fine of £10 (up to a maximum £900). At six months, you’ll be hit by an additional penalty of 5% of the tax due or £300 (whichever is greater) – repeated again if you’re 12 months behind schedule.
You could end up paying even more if HMRC believes you’ve been deliberately withholding information. If this happens, you’ll be charged 100% of the tax due or £300, whichever is greater.
As you can see, it really pays to get things sorted as soon as possible. You won’t have to deal with an increase in penalty amounts or the stress of having HMRC on your back.
Do you have a reasonable excuse?
Even if you missed the deadline, you could avoid having to pay a fine altogether. This only applies if HMRC thinks you have a ‘reasonable excuse’ for not getting sorted on time.
So what makes a ‘reasonable excuse’? Well, we already know that HMRC has waived the fine for taxpayers caught up in last year’s floods, but there are other things that could help your case.
According to HMRC, a ‘reasonable excuse’ is “something unexpected or outside your control that stopped you meeting a tax obligation”. Here are a few examples:
- Your partner or another close relative died shortly before the tax return or payment deadline
- You had an unexpected stay in hospital that prevented you from dealing with your tax affairs
- You had a serious or life-threatening illness
- Your computer or software failed just before or while you were preparing your tax return
If HMRC does decide that you have grounds for an appeal, you’ll still need to settle things up as soon as you possibly can.
However, it’s important to remember that not every excuse will be valid – so there’s no point trying your luck if you don’t have a good reason for being late.
Don’t let history repeat itself
The final thing to remember is to learn from your mistakes. If you missed this year’s deadline, it’s a good idea not to do the same thing next time around.
A good way to do this is to keep all your required information up to date as you go through the year, so you’ll know where everything is when the time comes to submit your tax return. You might also want to consider getting everything out of the way before Christmas, so you can enjoy the festive season without anything hanging over your head – except maybe tinsel.
If you simply found yourself overwhelmed with the amount of responsibility involved, another good idea is to seek specialist help and support. By choosing a dedicated contractor accountant, such as ourselves, you’ll receive expert guidance that removes the hassle out of self-assessment – leaving you free to get on with what you do best.
Want to know more?
As a busy contractor, you might find it beneficial to beat the rush and sort out your obligations as soon as you can. You’re able to submit your next self-assessment tax return any time from 6th April 2016 – leaving you the rest of the year without it hanging over your head.
Here at ClearSky Contractor Accounting, we’re committed to taking all the hassle out of self-employment, so you’re free to get on with what you do best. Our dedicated team of tax experts will be with you all the way throughout your career – and provide expert advice to help you get your affairs in order.
We’ll help prepare your tax returns and assist you with keeping up to date with all your other obligations.