PENALTIES FOR LATE TAX RETURNS
The tax year always holds up from 6 April until the 5 April following year. At the end of the tax year (after 5 April) the employees should receive a P60 form from their employer. This form contains the current year income statement, the amount of tax withheld and social security. This must be sent to the HMRC (tax office) by the employer.
If a person leaves his job during the year, the employer must issue a P45 form, which also contains the income, the withheld tax and the social insurance. This form has three copies and the next workplace should transmit copy 2 and 3, that the new workplace may deduct the tax appropriately and return it to the tax authorities.
It is essential that the new workplace receives the data of income from the previous working places, otherwise it will not deduct properly the tax advances, and the person will possibly have tax backlog at the end of the year that he will be required to pay to the tax authority.
But who is obliged to submit it?
• If you are self-employed
• If you had at least £ 2,500 of untaxed income in the current tax year
• If your saving or investing was over £ 10,000 before taxation
• If profit was derived from shares, second homes and the sale of other taxable assets
• You are a director at a company (except if it is a non-profit organization and you weren’t paid for it)
• If your or your partner’s salary exceeded £ 50,000 and you required child support
• You have incomes from abroad, after which you must tax
• You live abroad, but you also gained money from Britain
• Your salary exceeded £ 100,000
If you work as an employee, your employer will arrange this, so you can ease the belly, because you do not have to do anything in this matter. However, the information may be useful for everyone.
According to the British tax authorities (HMRC), tens of thousands of small taxpayers could avoid the lump-sum, simply by an earlier administration of the declaration. Those who administrate before 30 December have the opportunity to pay in installments if their payment obligation is less than 3,000 pounds. Those who owe less than £ 3,000 and want to pay in installments have to return their tax online until the midnight of 30 December and have to request a PAYE (Pay As You Earn) code.
The late return fine
Late return is a quite costly passion. Tax declarations arriving after 31 January are penalized by a late fee of 100 pounds, even if you have no tax liability or you pay your tax on time, and that’s not all.
If the tax return is delayed for three months, you need to count another 10 pounds per day late fee, so the 90-day pro-rata late fee and the original 100 pounds fee may climb up to 1,000 pounds.
If the return is delayed for six months, then you have to pay 300 pounds or the 5% of the debt besides the original punishment, depending on which is higher. In case of a 12-month delay another penalty will be added and in severe cases the duty may be even reduplicated.
Contact GM professional Accountants and choose a Local accountant to assist in your tax affairs. Gm professional accountants have offices located in London, Essex and Manchester.