Telephone: 01243 582926  Mobile: 07795671536  Email: baktax@aol.com 

If you have income which has not been taxed or are liable for higher rate tax or have been sent a self assessment tax return by HM Revenue & Customs (HMRC) even though you have no income to declare, you have a legal obligation to complete and submit a tax return as well as paying any tax liability due by certain deadlines. Failure to do so could result in penalties, interest and surcharges becoming payable in addition to the tax liability.

The deadline for submitting a paper tax return is 31st October, following the end of the tax year, 5th April. If submitted electronically the deadline is extended to 31st January following the end of the tax year. If these deadlines are missed a penalty of up to £100 will apply, with a further penalty if the tax return is still outstanding after the following 31 July.

The tax liability also becomes payable in full by the 31st January. Although, where the tax payable exceeds £1000 you may also be required to make provisional payments on account for the following tax year of the same amount, divided into two instalments payable by 31st January of that tax year and the following 31st July. Any balancing payment due, once the tax return has been completed and the final tax liability calculated, after taking into consideration the payments on account, becomes payable by the following 31st January.

Late payment of the tax liabilities will result in interest charges running on a daily basis currently at a rate of 3%. A 5% surcharge can also apply where the tax remains unpaid after 28th February and again after 31st July.

However, the £100 penalties, interest and surcharges can be avoided, even where the tax return is submitted late, provided a sufficient amount of tax has been paid by the 31st January (and the previous 31st July and 31st January where  payments on account were due) to cover the final liability. The penalties cannot exceed the tax outstanding, up to a maximum of £100. Therefore where the outstanding tax liability was say £75, the penalty cannot exceed £75. Interest and surcharges will only apply to the amount of tax outstanding.

If the completion of your tax return is a daunting prospect, with deadlines looming and not wanting to pay any more tax than is absolutely necessary, why not use my tax return preparation service. I will provide you with a checklist to assist you in collating the relevant  information  and   supporting documentation required to complete the tax return, letting accounts, capital gains tax computations etc, and calculate your tax liabilities, as appropriate, advising you when payments should be made.