Personal Tax Return

If you are required to complete a return, they are normally issued to you at the beginning of April each year. The basic return is 10 pages but many sources of income require supplementary pages to be completed as well. Some people receive a short tax return of only 4 pages.

As well as your income it deals with the allowances and reliefs that you can claim.

Paper returns have to be filed by 31 October following the end of the tax year and HMRC will calculate your liability for you. For online returns you have until 31 January following the end of the tax year to file the return. If you file the tax return online through the HMRC website the software will calculate your tax liability for you.

The penalties for late Self Assessment returns are as follows:

  • Initial £100 penalty for late filing of the tax return, irrespective of the tax due or if you have paid tax on time.
  • If you haven’t filed your return after 3 months daily penalties of £10 per day apply, capped to £900.
  • If you haven’t filed your return after 6 months a further penalty of 5% of the tax due or £300: whichever is greater.
  • After one year, another 5% or £300 charge, whichever is greater. In serious cases the penalty after 12 months can be up to 100% of the tax due.

The penalties are applicable even if no tax is due.

Corporation Tax Return

The corporation tax self-assessment return (CTSA) must be submitted to HMRC along with the accounts and tax computations, although it is possible to file all this information online through the HMRC website. The filing deadline for the CTSA return (plus accounts and tax computations) is normally 12 months from the end of the accounting period. If the return is late there are penalties as follows…

  • Up to 3 months late – £100 (increasing to £500 for a third consecutive late return)
  • Over 3 months late – £200 (increased to £1000 for a third consecutive late return)
  • 6 to 12 months late – Extra tax geared penalty of 10% of the unpaid tax.
  • More than 12 months late – 20% of the unpaid tax.

The Taxman has launched a campaign to persuade tardy taxpayers to submit their late tax returns for 2011/12 or earlier years. If you have a personal tax return form (or notice to complete a tax return) sitting in a drawer, and have been putting off the tedious task of completing it, now is the time to act.

The Taxman’s campaign is called: My tax return catch-up. It was launched in July and will run to 15 October 2013. It is not open to those who operate outside the tax system in the so-called ‘black economy’, and have never received a tax return form or notice to submit a tax return.

All the late tax returns must be submitted by 15 October 2013, which is also the due date for paying any tax due. If you can’t pay all your outstanding tax by that date, you can ask for a time to pay agreement to spread the late tax payment over several months.

The incentives for joining the tax return catch-up campaign include lower penalties for late tax return submission and late payment of tax. Just how much lower those penalties will be is not specified, the actual discount will depend on your circumstances.

If you, or a friend or relative, want to take part in the late tax return campaign, that taxpayer first has to tell HMRC they want to join. This can be done online, by phone or post and we can do this on your behalf. We can also help with completing the late tax returns, calculating the tax due, and negotiating for time to pay outstanding tax with the tax office. Remember submitting a late tax return can sometimes result in a tax repayment!

Newsletter issue – August 2013. Save Tax! Sign up to receive tax tips and news.