Tax Rebates & Refunds

What happens if you send your tax return in late?

December 21, 2012
Posted in Income Tax — Written by Geoffrey

For anyone who is self-employed or who runs their own business, filling in a tax return every year is an unavoidable task.

Just as important as being accurate and honest in your tax return, however, is sending it in to HM Revenue & Customs (HMRC) on time. There are certain penalties you will have to pay if you miss the deadlines set by the department, and these can quickly turn into very large sums indeed.

The following are HMRC’s current penalties for late self-assessment tax returns:

1 day late – you will have pay a fixed penalty of £100
3 months late – you will have to pay the £100 fixed penalty, plus £10 for each late day up to a maximum of £900.
6 months late – As well as the £100 fixed penalty and £10 charge for each late day, you will also have to pay £300 or 5% of the tax you owe, whichever is the largest sum.
12 months late – As well as the £100 penalty, £10 charge for each late day and £300 penalty (or 5% of the tax due), you will also have to pay another £300 (or 5% of the tax due)

So, as an example of a worst-case scenario, let’s imagine that you miss the tax return deadline by 12 months. You will end up paying around £1,600 or possibly even more. In addition, if you are owed any tax rebates and you send in your tax return late, you will have to wait extra time for the refund to be processed.

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