Prepare for a Happy New Year
No doubt most people are making plans for Christmas at present. However, if you are self-employed, there is something else you need to be planning for. The deadline for filing tax returns for the year ended 5th April 2018 falls on 31st January 2019, so time is running out. If you haven’t filed already, getting your tax return completed before Christmas should set you up for a happy new year.
It is estimated that around 11 million people will have been required to submit a tax return this year, in line with the level of returns in the previous year. Approximately 93.5% of returns were filed by the deadline of 31st January 2018 avoiding fines. However, many of those were filed on the final day, with a height of 60,596 returns an hour at one point. With this potential rush, the chances of the filing website being overwhelmed, preventing last minute filing by some, increase dramatically. Those finding that they need help are also likely to find the HMRC support lines are jammed, resulting in long hold times. Even those making a belated decision to engage an accountant could find themselves out of luck, as many will be dealing with existing clients who have brought in their records late.
Having a last minute issue with filing will not be considered a valid excuse by HMRC. If you fail to submit on time due to lack of planning, you could face the following penalties.
• Immediate – £100. This is a flat rate penalty that will apply simply for missing the deadline. It is not reduced if little or no tax is due.
• After 3 months – £10 per day until the return is filed – up to a maximum of £900
• After 6 months – 5% of the tax still due or £300 – whichever is greater
• After 12 months – A further 5% of the tax due or £300 – whichever is greater.
These penalties are cumulative, so simply failing to file a return can be costly. There are additional penalties arising for failure to pay tax on time as well as interest accruing on late tax payments.
All in all, not sorting things out could make 2019 a nightmare for the self-employed. Give yourself
an early Christmas present, and get it done now.
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