January Tax Return Deadline

The start of 2014 marks the final month in which to file your 2012/13 tax return.

HM Revenue & Customs (HMRC) estimates 10.9 million people are required to submit a 2012/13 tax return. Taxpayers will need to file their returns electronically by 31 January 2014 in order to avoid being issued with an automatic filing penalty.

In this article, we take a closer look at the self assessment filing deadlines and raise some important issues that tax payers should be aware of.

The time has passed for paper returns

You do have the option to file your tax return on paper, but the filing deadline for paper 2012/13 returns is 31 October 2013 and has already passed. If you were to submit a 2012/13 tax return in hard copy now that the paper tax return filing deadline has passed, HMRC would treat this as the late filing of a paper return. As a result, it is probable that HMRC would issue you with an automatic late filing penalty soon after January 2014.

Getting ready to file online

It takes some time to get registered with HMRC; both in terms of informing them that you need a tax return (because you’re newly self-employed for example) and also to obtain online access to HMRC’s website to file your return electronically. So it’s really important that you factor in some processing time. And remember, contrary to popular belief, HMRC will not necessarily send you a tax return to complete- it is your responsibility to register for Self Assessment if necessary.

High Income Child Benefit Charge From 7 January 2013, you may be liable to a new tax charge if you, or your partner, have an individual income of more than £50,000 and one of you is receiving Child Benefit. It may also apply if someone else receives Child Benefit for a child that lives with you. If your household decided to keep receiving Child Benefit payments, the highest earner will need to declare the amount they or their partner are entitled to by filling in a tax return each year and registering for Self Assessment if not done so already.

Don’t leave it until 31 January

The more time you leave yourself to prepare your return, the better. This should reduce the risk of errors and mistakes being made, which could not only be costly, but could also mean that you end up having to re-do your return.

Statistics Last year, the busiest day for online returns was 31st January 2013, when HMRC received 578,000. The busiest hour occurred between 4pm and 5pm, when 46,000 returns – more than 12 per second – were received by HMRC. So don’t leave your return until the final day, as HMRC’s website and call centres will be under tremendous pressure.

Late Filing Penalties

Up until a few years ago, an automatic penalty of £100 would be issued for a late tax return and this could be reduced if you paid your tax by the due date or the tax liability was less than £100.

However, this system was replaced and a late tax return is currently subject to the following penalty regime:

An initial £100 penalty, which will apply even if there is less than £100 tax to pay or the tax due is paid on time

After 3 months, additional daily penalties of £10 per day- up to a maximum of £900

After 6 months, a further penalty of 5% of the tax due or £300; whichever is greater

After 12 months, another 5% of the tax due or £300, whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due

Each of these penalties is in addition to one another, so a return filed a year late could face penalties of at least £1,600 - and this could escalate depending on the level of tax due.

Penalties are a waste of your hard-earned cash and you do not get tax relief for them either.

And there’s more…

Please be aware that the penalties described above, are only for the late filing of a Self Assessment tax return. There are additional penalties for the late registration with HMRC and late payment of tax- the latter of which also incurs interest.

Help at hand

HMRC’s online filing system for tax returns calculates your tax liability for you. But needless to say, it will not check whether your figures are accurate or that you have claimed your full entitlement to expenses, reliefs and allowances.

But your local TaxAssist Accountant would be happy to take care of all your tax affairs for you; from registration with HMRC, to completion of the return, to calculation of your tax liability and the due dates.

So don’t get the New Year off to a bad start by filing your tax return late and facing a late filing penalty.

Date published 2 Jan 2014

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.