Tax Relief Unveiled: What You Need to Know and How to Claim It

 If you miss the deadline for filing your tax return, you will be penalised.

Make sure you file your taxes by the specified date. Online filing of individual tax returns for the 2014–15 tax year (which concluded on April 5, 2015) is required to be completed at the very least by January 31, 2016. This deadline also applies to the payment of any taxes that are past due for the 2014-2015 fiscal year.

It is imperative that this date not be missed in order to avoid incurring the penalties that are associated with filing taxes late (even if no tax is due). A late payment of tax results in additional fees, including interest and penalties.

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There are fees associated with late returns.

The penalty structure for failing to file one's self-assessment returns on time is stringent. Even if the whole amount of tax that was owed was paid on time, a penalty may still be assessed if the tax refund is even just one day late. If you miss the deadline to submit your return, which is midnight on the 31st of January, you will be subject to a penalty of £100, regardless of whether or not you still owe tax. It is recommended to take care of this matter as soon as possible, preferably before the fines begin to pile up, as receiving such a penalty should function as a trigger to file the outstanding return, and it is best to deal with it sooner rather than later.

Once the due date for the return has been missed by three months, additional penalties will be assessed. After that point, the penalties will accrue at a rate of £10 per day for a maximum of 90 days, which will total £900 if the limit is reached. After that, further fees will be deducted from your account at the six-month and the twelve-month marks. Returns that are submitted more than six months after the due date are subject to a penalty equal to £300 or, if the amount owed is larger, 5% of the tax. If the tax return is not submitted within a year of the due date, an additional penalty of five percent of the total amount of tax owed or £300, whichever is greater, will be assessed. At this point, a penalty equal to up to one hundred percent of the tax that is owed may be assessed in extraordinary circumstances.

Example

Patrick is obligated to submit a tax return for the 2014-2015 fiscal year as a director of the company he works for. Because he has a lot of other things to do, he keeps putting it off and finally submitted his tax return on December 2, 2016, which is just over 11 months late. Even though he does not owe any taxes, he will be subject to penalties totaling £1,300 for filing his return late. These penalties are comprised of a £100 initial penalty, £900 in daily fines, and a £300 penalty for failing to file the return within six months.

Important information needed

Late filing penalties are assessed even if there is no tax obligation, and they can amount to 1,600 pounds or more if the return is filed for more than a year after it should have been filed.

Late payment penalty

Those who pay their taxes late are subject to interest charges. The interest period begins on the date that the payment is due and continues until the date that the payment is made.

If the tax is not paid within thirty days of the due date, additional penalties will be applied. Due to the fact that 2016 is a leap year, the 30-day mark is attained on March 1 of that year. If you owe tax and you don't pay it within 30 days, you'll be subject to a penalty equal to 5% of the amount of tax you owe. At the six-month and 12-month milestones, additional penalties equal to 5 percent of the unpaid tax are imposed for any tax that has not been paid in full.

Reasonable justification

If you can demonstrate that you had a valid reason for not filing your return on time or paying your taxes when you were supposed to, you may be able to have the penalties waived. However, it should be brought to your attention that the HMRC has a somewhat stringent definition of what constitutes a valid justification. Taxpayers who have been impacted by flood damage are encouraged to get in touch with HMRC as soon as possible.

Please get in contact with us here at Inform if you require more assistance on tax refund or information on any other tax-related problems.