10 worst reasons for late tax return filing
HMRC have apparently “heard it all” when it comes to excuses that people come up for late tax return filing.
In a press release from last year, they cited the top 10 worst excuses in the 2013-2014 tax year as being:
• “I left them in the shed and the rat ate them”
• “I’m not into paperwork – my sister looks after it. But we’ve had a falling out”
• “My accountant has been ill”
• “My dog ate my tax return”
• “I’m away on deadline day and there’s no internet where I am so I can’t do it online”
• “My laptop broke at the same time as my washing machine”
• “My niece moved in and she made the house so untidy that I couldn’t find the slip of paper that had my HMRC log-in details on it”
• “My husband ran over my laptop”
• “I had an argument with my wife and I went away to Italy for 5 years”
• “I had a cold that just took too long to go”
Needless to say, HMRC did not accept these excuses. I wonder why? 😊
Late tax return filing – what will HMRC accept?
HMRC offer guidance on what they will accept for late tax return filings, and they are:
• your partner or a close relative died before the tax return or payment deadline
• an unexpected stay in hospital
• a serious of life-threatening illness
• your computer or your software failed before or during preparing your online return
• HMRC’s own service issues (check here for more)
• fire, flood, or theft
• postal delays
• disability-related reasons
If any of these reasons stop you from filing your tax return on time, HMRC will still expect to you send your return or payment as soon as possible after the reason for delay has passed.
Late tax return filing – if they don’t accept my excuses and I keep putting off filing and paying HMRC
We wouldn’t advice this course of action.
Let’s look at this example of what would happen if you delayed filing and paying HMRC for a year.
| Type of penalty | Reason for penalty | Charge for penalty |
| Filing | Missed filing deadline of 31 January 2019 | £100 |
| Payment | Tax unpaid by 1 March 2019 | £750 (5%) |
| Filing | Missing 3 month late deadline of 30 April 2019 | £10 a day (up to £900) |
| Filing | Missing 6 month late deadline of 31 July 2019 | £750 (5% or £300 whichever is greater) |
| Payment | 1st August 2019 - tax six months late | £750 (5%) |
| Filing | Missing 12 month late deadline of 31 January 2020 | £750 (5% or £300 whichever is greater) |
| Payment | 1st August 2019 - tax twelve months late | £750 (5%) |
|
Total |
£4,750 |
£4,750 in penalties if you get your tax return in a year late! And that does not include the interest.
It’s not worth it, but we all know that already.
Late tax return filing – fear of not being able to pay
Many people, for understandable reasons, try to use excuses like these because they don’t have the money to settle with HMRC at the time. It seems completely sensible to portray your adventures in filing your tax return as blighted by hapless luck not in any way instigated or caused by you.
Rest assured though because, since the financial crisis of 2008, HMRC have become a lot more forgiving about people and companies not having the ready wherewithal needed to pay their bills on the exact due date.
A system exists, and it’s used by over a million people and companies every year, called Time To Pay.
If they’re agreeable, HMRC can split your payment into up to 12 equal repayments collected once a month by direct debit. Time To Pay not only applies to personal tax but to corporation tax, VAT, and even PAYE sometimes.
Phone up the revenue before 31st January and let them know the following:
• how much of your bill you will have trouble settling
• how much you can settle right now
• that this is your last resort and you’ve been turned down by finance companies, family, and friends for help in meeting the bill.
If you get a Time To Pay, never miss a direct debit payment. In most circumstances, HMRC will rip up your Time To Pay and demand the whole sum.
Get your tax return in on time – talk to Panthera
To work with us on getting everything ready and filed in time and help with getting a Time To Pay agreement, please call Panthera on 01235 768 561 or email the team at enquiries@pantheraaccounting.co.uk.