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HMRC looks to pre-empt late tax returns

The tax authority wants to avoid a repeat of the collapse of its 'reasonable excuse' criteria for fixed penalties last year

15 January 2016

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HM Revenue and Customs have sought to pre-empt self-assessment tax returns being filed late by releasing a list of some of the worst excuses used in the 2013/14 year for late submission.

Chief among the excuses given was, 'My tax papers were left in the shed and the rat ate them', in a list which also includes the typical, 'My dog ate my tax return'.

The deadline for submitting tax returns and paying any tax owed is 31 January 2016 - failure to complete a tax return, even if there is no tax due, will result in an immediate £100 fine.

Last year was the first time the immediate £100 fixed penalty was used and it resulted in the issue of 890,000 fines.

However due to the draconian nature of the fine, the amount of people caught up in it and the resources it would take to sieve through all of the excuses given by tax payers, HMRC began waiving the fine for virtually anyone who contested it by May 2015.

Ruth Owen, HMRC's director general for personal tax, says that this year, those trying to 'play the system' will duly receive their fine if they shirk their responsibilities again.

'We understand that life can be unpredictable and for those customers who have a genuine excuse for missing the 31 January deadline, such as the flooding, help is on hand. My advice would be to contact us through our helplines or online, as soon as possible.

'But for those who are trying to play the system, while the rest of us do the right thing, the message is clear: submit your tax return online by 31 January or face a fine. We're here to help people in genuine distress, but not to act as a free lender to people who can't meet their responsibilities to pay their tax.

The tax authority has opened a dedicated helpline (0800 904 7900) for people affected by severe weather and flooding.

The penalties for late tax returns are an initial £100 fixed penalty. After three months, daily penalties of £10 per day are incurred, which can rise to a maximum of £900. After six months, a further penalty of five per cent of the tax due is incurred, or £300 (whichever is greater).

After 12 months, another five per cent penalty or £300 charge becomes due (again, whichever is greater).


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Tax & Wealth structuring