Filing your Self-Assessment tax return isn’t always a fun task. There are a lot of numbers involved, plenty of industry jargon, and deadlines that are hard to keep track of. Just because it’s difficult, though, doesn’t mean you can afford to strike it from your to-do list and settle for a late tax return.
The government has set deadlines for when you’ll need to complete your Self-Assessment tax return. But what happens if you miss them?
Whether you’re conducting proactive research or have missed a tax deadline, we’ve got everything you need to know in this guide.
When Do You Need to File Your Tax Return?
In the UK, sole traders and partnerships must file a Self-Assessment tax return every year to report their earnings for income tax purposes. This must be completed and filed by 31st October in the same year for paper tax returns and 31st January the following year for online tax returns.
For example, the 2023/2024 tax return will be due on either the 31st of October 2024 or the 31st of January 2025, depending on how you choose to file your return.
You can submit your tax return from the end of the tax year (5th April) onwards, giving you 6-9 months for submission.
Do note, too, that if you need to submit your first tax return for the year and you haven’t yet done so, you need to register for Self Assessment by 5th October in the same year.
What Happens If You Miss the Tax Deadline?
If you miss the tax deadline, you’ll receive a penalty from HM Revenue and Customs (HMRC). This will include an initial financial penalty alongside follow-up penalties if you continue failing to file your Self Assessment. In other words? Skipping a deadline is pretty expensive.
How Much Does HMRC Charge For a Late Tax Return?
As of August 2024, the penalty for a late tax return is £100. This is applied if your Self Assessment is 3 months late. After this, you can expect additional penalties until you file your tax return, including interest accrued after 30 days of not paying. At both 6 and 12 months after the deadline, you’ll receive an additional penalty.
It’s your legal responsibility to submit your tax return and pay your tax bill. Be warned that if you continue failing to submit your tax return, HMRC is likely to take legal action.
Do I Need to File a Tax Return If I Haven’t Met the Threshold?
If your earnings don’t exceed your personal allowance (the amount of money you can earn as a sole trader or partnership without paying tax – currently £12,570 as of August 2024) you’re still required to submit a Self Assessment tax return. This is because HMRC needs a consistent record of how much you’ve earned.
If you don’t meet the personal income tax threshold and fail to file a tax return, you’ll be subject to the same penalties we outlined above.
What Happens If an HMRC Payment Is Late?
As of August 2024, the deadline for income tax payments is 31st January the following year. If you miss the deadline for paying your tax bill and still haven’t paid after 3 additional months, you’ll receive a 5% fine. You’ll also generate interest on your bill, and face additional fines 6 months and 12 months after the deadline.
It’s really important to remember that HMRC can take further action against a missed tax bill, too. This includes:
- Taking your personal possessions to sell at auction
- Withdrawing money directly from your bank account
- Closing down your business or declaring you bankrupt
- Taking you to court
As you can see, none of these are ideal! It’s always best to file your return and pay on time to avoid any repercussions.
How Do You Pay an HMRC Penalty?
There are a number of ways you can pay an HMRC penalty for a late Self Assessment tax return or missed payment, including:
- Via your online bank account
- By bank transfer
- Via your debit or corporate credit card
- In-person at your bank
- Cheque
These methods can vary in the time it takes for HMRC to process them, making it crucial that you pay your tax bill or penalty a few days before the deadline.
We recommend taking a peek at the HMRC guidance to learn more about how you can pay.
What Happens if You File a Late VAT Return?
Some business owners will need to file a VAT return as part of their tax obligations. This may need to be filed more frequently than tax returns depending on how you do your accounts, with options for monthly, quarterly, and annual submissions.
If you miss your VAT deadline (even if you have nothing to declare) you’ll be given a penalty point from HMRC. After you surpass the penalty point threshold, which varies depending on the frequency of your accounting period, you’ll be fined £200. Each subsequent late return will also receive a £200 fine.
Make Tax Returns Simple With Angel Bookkeeping
Missed tax returns aren’t just a bit of a headache; they can result in substantial fines and legal action, making them a legitimate threat to your business. Luckily, though, we’ve got your back.
If you’re worried about missing a tax deadline or making your payments on time, our team at Angel Bookkeeping & Payroll Services can help. With our experienced bookkeeping, we’ll ensure all of your documents are ready to go at the end of the tax year and remind you of key deadlines. We can also help with deductible expenses and arranging plans to make paying your tax bill easier.
With our team by your side, you’ll never have to worry about missing a tax deadline again. Get rid of tax stress by getting in touch with us today.