The online filing deadline for 2018/19 self-assessment tax returns is fast approaching. Those who file their tax returns digitally have until 31 January 2020 to get their return in. In the rare instance where someone was required to file on paper, the deadline of 31 October 2019 has already passed. 

These deadlines are fixed and apply to all returns. The only standard extension to this date is if HMRC have requested a return late. If you have only received a first notice to file a return recently then the deadline for that return is 3 months from the date of issue of that notice. Other extensions to the deadline will not normally be possible. 

Penalties for late filing of your return

Automatic penalties apply if your return is filed after the deadline. They apply whether you have a tax liability or not. Even filing a minute into 1 February 2020 will be enough for a return to be considered late for penalty purposes. If you delay longer than this then higher penalties are possible. The penalties for late filing are as follows:

• Missed 31 January 2020 filing deadline – Fixed penalty of £100

• 3 months late – £10 per day for up to 90 days (£900 maximum penalty)

• 6 months late – £300 or 5% of the tax due, whichever is higher

• 12 months late – £300 or 5% of the tax due, whichever is higher. Also at this point HMRC will start looking into the reasons for the failure to file. If they consider there has been a deliberate attempt to conceal tax due then additional penalties of 100% of the tax due are possible. 

These penalties are cumulative. An individual with no tax liability could still find themselves with £1,600 of penalties if they fail to file for 12 months. 

Consultation is currently underway for replacing this with a points-based system similar to that used for driving licences. 

Penalties for late payment of tax

As well as requiring the tax return to be filed by 31 January 2020, the balance of any tax due for 2018/19 is also payable on this date. Any late payments will attract interest at the official rate (currently 2.5%) but late payment penalties are also possible as follows. 

• 30 days late – 5% of tax outstanding

• 6 months late – 5% of tax outstanding

• 12 months late – 5% of tax outstanding

Late payment penalties are based on the amount still owing at the penalty date. If you have made part payment of your
tax liability by these dates, the penalties will reduce accordingly. 

Addressing a late return

Unless you were one of the few people required to file your return on paper, you still have time to meet the deadline. However, if you fail to meet the deadline anyway, there are a couple of possible ways of dealing with this. 

Cancelling your return

Firstly, it is possible that the request to complete a return has been made in error. This will usually happen if you were required to file a return in earlier years, but the reason for this has ceased (e.g. you sold a property you had previously been renting out). 

If this is the case, you can contact HMRC to ask them to withdraw the return. Contact can be made through the Self-Assessment general enquiries number, 0300 200 3310. You will be asked for details of your income in the relevant tax year to confirm no return is required. If HMRC agree then the return is cancelled and any penalty you have already incurred will also be eliminated. 

This will only be possible if no return has been submitted. Once you have submitted a return then this validates the notice to file and the return cannot be withdrawn. HMRC will also not withdraw a return if you have had self-employment within the year, no matter how short, or if you are a company director.

Reasonable excuse

If you have a good reason for the delay in filing, you may be able to appeal on that basis. Whilst not considered exhaustive, HMRC provide a list of reasonable excuses that they will consider. 

• your partner or another close relative died shortly before the tax return or payment deadline

• you had an unexpected stay in hospital that prevented you from dealing with your tax affairs

• you had a serious or life-threatening illness

• your computer or software failed just before or while you were preparing your online return

• service issues with HMRC online services

• a fire, flood or theft prevented you from completing your tax return

• postal delays that you could not have predicted

• delays related to a disability you have

By contrast, they also supply a list of what will not be accepted as a reasonable excuse.

• you relied on someone else to send your return and they did not

• your cheque bounced or payment failed because you did not have enough money

• you found the HMRC online system too difficult to use

• you did not get a reminder from HMRC 

• you made a mistake on your tax return

Submitting an estimated return and amendment

If you are unable to compile the figures for your return in time you can submit your return with estimated figures. You will need to tick the box on page 8 of your return showing that it contains provisional figures. Tax will be due on the basis of these figures until you submit an amended return showing the accurate amounts. 

Amending returns is not restricted to those who have entered estimated figures. If you find you have made an error on your return, you have until 31 January 2021 to submit an amended return to correct that error. 

Arranging time to pay

If you are unable to pay your tax bill on time, you can contact HMRC to arrange time to pay. You will need to have submitted your return before you contact them in order to confirm the amount due. You should also aim to make contact before the payment deadline as HMRC tend to look less favourably on requests after the tax is due.

To ask for a payment arrangement, you need to contact the Business Payment Support Service on 0300 200 3835. They will ask for details of your current income and expenditure and what other ways you have tried to acquire the necessary funds to make payment on time. If they agree that you cannot pay in full on time, they will normally put a payment plan in place, requiring a direct debit for future payments. 

Providing you keep making payments on an agreed plan, then your tax payments will be treated as made on the date of the agreement for penalty purposes. Interest will still be due on late payment. If you fail to keep up a payment plan then HMRC will normally cancel the arrangement and start legal action.

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