Deadlines are there to be missed, so the saying goes. The 31 of January has been and gone. While many will have dealt with their taxes for another year a significant number of others will have missed the deadline. If you are one of these many others it is important to act as soon as possible rather than doing nothing and hoping it all goes away.
The second the deadline passes, the HMRC computers have added a £100 penalty to your tax bill. You then have a reprieve for the next 3 months to sort out your tax affairs. After this time, they up-the-anti with a punishing £10 a day for the next 90 days. Ouch! After those ninety 90 days are up the third phase kicks in. More penalties…and it goes on.
Are these penalties fair? They are supposed to act as an incentive to submit your tax return on time. But they are a one size fits all, regardless of the size of your tax bill (or the reason for your delay). Large fines can be obtained in a relatively short space of time and can easily end up more than what needs to be paid in tax. Perhaps this carrot and stick deterrent has too much stick and not enough carrot. A different system of rewarding tax payers to submit before the deadline could be an effective alternative system.
Until that system is found, there is one way out, that’s if you have a HMRC acceptable reasonable excuse, they will let you off – but that’s not easy either, but then, why should it be?
AIMS Accountants for Business – if you like the way we think you’ll like the way we work.