January deadline for online tax returns is looming

Small Business owners are running out of time to file their online Self Assessment Tax Returns.

HM Revenue & Customs (HMRC) has a deadline of January 31st for all online filing to be submitted for those who have missed the paper-based tax return deadline on October 31st. With just weeks remaining, a number of taxpayers could be encouraged to seek the advice of a qualified accountant to make sure all their affairs are in order in plenty of time.

Those who fail to adhere to the deadline will face the prospect of an automatic £100 fine and could also face further charges from HMRC. The department has confirmed that those who miss the deadline will also face the prospect of surcharges on the amount of tax owed.

“If HMRC receives your tax return after the filing deadline, you’ll be charged an automatic £100 penalty,” the HMRC website warns.

“If you pay your taxes late HMRC will charge interest from the date the tax was due until your payment is received and if you still haven’t paid your balancing payment by February 28th you may be charged a five per cent additional charge, called a surcharge, on top of the amount you still owe. This is in addition to any interest you’ve been asked to pay.”

If after six months you have still not paid, another 5 per cent may be added on top of the amount you still owe. And whilst the tax remains overdue, interest will be accruing on a daily basis (currently charged at 3%).

It comes as HMRC has launched a consultation on the prospect of fining small firms for poor practice in relation to tax record keeping. According to industry publication Accountancy Age, the department is considering the punishment in a bid to reduce the amount of unpaid tax arising from poor bookkeeping.

The news could again encourage small business operators to seek the assistance of an accountant in order to keep on top of their tax records and avoid a potential fine.

Outlining the benefits such a move would bring, the news provider commented: “…businesses will benefit from improved financial management which in turn will boost their chances of survival. Those seen to be fulfilling their obligations will likely have a lower chance of a subsequent compliance intervention from the taxman.”

HMRC has also urged taxpayers to sign up in plenty of time for online filing of tax returns if this is to be their first time using the service.

“It’s important you register as early as possible. It can take up to seven working days to receive your Activation Code – so HMRC is urging people to register in December, to avoid a last-minute rush in January,” it added.

 

Posted by Jacob Williams