Don’t miss tax deadlines
If you miss the deadline for filing your self-assessment tax return (31 January for online filing) you will be charged a £100 penalty.
If the return is filed more than three months late, an additional £10 per day is charged and, after six months, another penalty is incurred (the higher of £300 or 5% of the tax due). The flat-rate penalties will stand even if the tax return shows no tax.
Your company’s corporation tax return is due a year after the end of the accounting period. The penalty for being even one day late is £100 and another £100 is imposed after three months, then 10% of the tax due if the return is six months late. If you make a habit of submitting late company returns, the fixed penalties rise to £500 each time.
If you have a ‘reasonable excuse’, HMRC may agree to cancel the penalty. However, what you think is a reasonable excuse may well be found not to be so by HMRC or a tax tribunal.
Paying tax late will also attract interest and sometimes a penalty. VAT penalties are changing from April 2022 to allow some leeway if the debt is paid within 15 days, but debts arising before then can trigger a penalty of up to 15% of the delayed payment, for even being one day late.
Where you will have difficulty in paying tax debts falling due, you should ask HMRC to set up a payment plan to spread the debt over up to 12 months. Do this as soon as possible.
If you can’t pay the tax due, contact HMRC for a payment plan.