Company No: 09234927 Registered in England and Wales

156 Hanworth Rd, Hampton TW12 3EY, UK

Tel: 020 8234 6184

©2019 by Seed Accounting Solutions Ltd.

  • Tamsyn Jefferson-Harvey

Is it worth filing your Self Assessment late?

Everyone knows about the £100 on-the-spot fine for not submitting a self assessment on time. But do you know what late payment of tax or late filing could cost you? Take a look below:

Late filing of your return:

On the spot fine - £100

3+ months - £10 per day (up to 90 days)

6+ months - 5% of tax due

12+ months - 5-100% of tax due (depending on the reasons for late filing)

Numbers 3 and 4 are subject to a minimum penalty of £300

Late payment of tax:

Interest will be charged at 3% from the day it was due until the day it was paid, and charged on a daily basis. In addition to the interest there are also penalties charged for late payment of tax:

30+ days late - 5% of tax due

6+ months late - further 5% of tax due

12+ months - further 5% of tax due

Insufficient funds, not fully understanding the system or self assessment are not accepted as reasonable excuses. Serious illness will be taken into account.

HMRC are not the fierce dragons they once were thought to be, they are now helpful and will reward honest, organised people if they contact them in advance of a deadline to install payment plans and make suggestions. It is never worth leaving it late. Take a look at these examples:

Anna is a sole trader in her first year and has not made any profit, and has no tax to pay. She decides she won't submit her self assessment tax return because she isn't entirely sure how to do it, and as she has no tax to pay, it won't matter...will it? on the 15th May following the deadline, a friend tells her she should have submitted one anyway, to declare that she has no tax to pay. With the help of an accountant, she submits her return, and gets the following penalties:

£100 (on-the-spot penalty for non-submission)

45 x £10 = £450 (3+ months late)

£550 total penalties owed, despite having no tax to pay.

Bob has had some intermittent self-employed work and decides he doesn't want to declare the work - it was cash in hand so the'd never be caught. HMRC find out he has been doing this for several years and decide he would have had a £4,000 tax bill for the 2013-2014 tax year. It is now the 1st February 2016. He pays everything then and there.

£100 (on-the-spot penalty for non-submission)

90 x £10 = £900 (maximum 90 days for non-filing for 3+ months late)

£200 (5% of tax due for late payment of tax for 3+ months late)

£200 (5% of tax due for non-filing for 6+ months late)

£200 (5% of tax due for late payment of tax for 6+ months late)

£4000 (deliberately withholding information with concealment by non-filing carries a penalty worth 100% of the tax owed for 12+ months late)

£200 (5% of tax due for late payment of tax for 12+ months late)

£120 (interest on late payment of tax for 366 days)

Total penalties and interest due: £5920 (in addition to £4000 tax owed)

So as you can see, the penalties add up. It is always better to submit your tax return and if you have made a genuine mistake, you are allowed to amend it up to 12 months after the deadline with no penalty owed.