It’s not just at Halloween that you have to avoid the zombies!
It’s Halloween, which means the ghosts and ghouls are out in force and gearing up for another night of spooky terror. And there are zombies on the loose - who aren’t out to suck your brains, but take your cash!
Well, OK, maybe “zombies” isn’t the most flattering of descriptions for HMRC - but, for some people, the prospect of being chased by the taxman and issued with a fine for not filing their tax return properly can be similar to running in terror from the undead. And when you’ve not followed the rules properly, HMRC can be pretty relentless in chasing you.
If you don’t already know, whenever you fail to file your self-assessment tax return in time - or pay tax when it’s due - HMRC have a strict penalty regime which has recently become even more rigid.
They insist that they “want returns, not penalties” - but in January 2012, the £100 fine for not filing a tax return by 31st January became automatic. Before then, it was waived if the taxpayer had no tax to pay, or reduced to no more than the tax due if the tax liability was under £100.
It means that now, if you file your tax return just a single day late - and even if you have no tax to pay or if you’ve already paid your tax bill - you’ll be automatically fined £100. And if you file more than 3 months late (that is, on or after 1st May) and you’ll be fined £10 for each day you’re late filing, up to a maximum of £900, plus the automatic £100 fine.
But that’s not all! In addition, if you file more than 6 months late - i.e if by 1st August you still haven’t filed - then as well as the £1,000 from above you’ll be fined another £300 or 5% of the tax from your return, whichever is the higher figure.
And if your return is over 12 months late, you’ll have to pay the above penalties, at least £1,300, plus another £300 or 5% of the tax due, whichever is the higher.
So for being a year late with your tax return, you’ll pay a minimum fine of £1,600; and this may be even higher if your tax bill was over £6,000 - as sometimes HMRC will also impose another fine of up to 100% of the tax due. They say they will do this ‘where a taxpayer is found to have withheld information deliberately or deliberately with concealment by not submitting a return” - which means, in plain English, when you’ve knowingly hidden income by not filing a tax return, and paid too little tax as a result.
So, if you don’t want to feel like you’re being chased by zombies and have your money eaten by the taxman, make sure you file your tax return on time. It’s the only way to hold onto your cash and keep the wrath of HMRC at bay!
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