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December 8th, 2019
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Penalties for Late Filing of Tax Returns and Accounts

Struggling to File your Company Paperwork on time? These are the late filing penalties you will be charged by HMRC if you miss those deadlines!

Paperwork can get on top of us all at times, but making sure your tax returns and company paperwork is filed on time is so important. The penalties for not doing so are a great incentive to make sure you get everything done on time.

So, what are the penalties?

Self -Assessment Tax Return

These are due on 31st January each year. You will be penalised if you don’t submit your tax return, as well as if you are late paying any tax due, so it is important to submit your return on time, even if there is no tax to pay.

Missing the January 31st deadline will cost you £100 in fines. If you still haven’t filed your tax return 3 months later, you will then be hit by a £10 a day fine for every day it is late (up to a maximum of £900). If August rolls around, and you still haven’t submitted your return, you can add an extra £300 fine (or 5% of the tax owing, whichever is greater).

These fines quickly add up, and that is before you take into consideration any penalties for not paying the tax owed!

Late payment of Income Tax

So, you have filled in your tax return on time, but not paid what you owe.  After 30 days, you will be hit with a 5% charge on the tax you owe. If you let it increase to 6 months, there is another 5% charge on the tax owed, with another 5% added if it reaches 12 months. You will also be paying interest on the amount owing, at a rate of 3% .

Company Accounts

These are due 9 months after your accounting period ends. If you miss this deadline, expect a £100 fine the next day. Still not done 3 months later? That’s another £100 fine.

If, after 6 months, you still haven’t filed this, HMRC will estimate your Corporation Tax bill for you, and add an extra penalty of 10% of the unpaid tax, with that increasing after 12 months by another 10%.

If you have missed the deadline three times in a row, the financial penalties increase to £500 each for filing your tax return one day late and three months late, and the 10% surcharge applies to any unpaid tax after 6 months and 12 months.

VAT Return

Penalties for not submitting your VAT return on time, and paying what you owe are also high, and get higher the more often you miss the deadlines. The first time you miss your deadline, you won’t pay a surcharge. However, if you miss a second one, the percentage you are charged will increase. The surcharge is a percentage of the VAT outstanding, starting at 2%, and rising to 15% as you miss additional deadlines.  You can also be hit with penalties if your returns contain careless or deliberate errors, you believe that HMRC have sent you an assessment that is too low and you don’t tell them, or if you submit a paper VAT return when you need to do so electronically.

Avoiding Penalties

To avoid late filing penalties, ensure you know when your deadlines are for submission, and try to complete these well before the relevant dates. If you are struggling with any of the above, it is important to seek advice as soon as possible.

Mark and the team at Choice Bookkeeping are on hand to help with all your bookkeeping needs.  As an affordable alternative to an expensive accountant, speak to Choice Bookkeeping for a free consultation to see how they can help you and your business with all your bookkeeping needs. From filing of self-assessment returns, company accounts, payroll, setting you up on the right accounting software and so much more. With offices in Monmouthshire and Pembrokeshire, they cover all of South and West Wales and the surrounding areas. Give them a call today on 01291690646.

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