HMRC Self Assessment Penalties
Paper self-assessment tax returns were due on October 31st, and online self-assessment tax returns are due on January 31, 2022, to pay what is owed. Failure to complete a return by the due date can result in a penalty. Automated penalties are sent to those failing to complete a return, and can be sent in error.
With a reasonable excuse, a late tax return penalty can be challenged, but when you fail to submit your return the HMRC will demand payment.
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What Are Some Reasonable Excuses For Filing Your Tax Return Late?
A reasonable excuse is required to challenge a tax return penalty. Don’t ignore the tax department, as they are not going to forget about you.
Common reasons why people are late in submitting a return are:
- You may not be eligible for self-assessment.
- Postal delays
- Illness or death of a loved one.
- Software meltdown
- Acrimonious divorce proceedings
The penalty incurred is usually 5% of the amount owed, and if the return is three months late you will pay a penalty of 100 pounds, so it is important not to delay, and get help to make a valid appeal.
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Employment law does not usually cover self-employed people, as they are considered their own boss. However, they still have protection for health safety and discrimination. Their rights are set out by a contract signed with their client.
HM Revenue and Customs (HMRC) May regard someone as self-employed for tax purposes and often need to check whether they are exempt from PAYE or whether they have employee’s rights.
If the employment status is proven to be wrong. Both individuals and their employees may have to pay the unpaid tax or lose entitlements.
Checking Employment Rights
A person is considered self-employed and does not have the rights of an employee when they submit invoices for the work done and are not under direct supervision when working. They use terms like consultant or independent contractor to describe themselves.
Excuses For Late Filing of Tax Return
If you failed to file a return by October 31, you are not alone, as the deadline is missed by over 800,000 people a year. It is obviously a huge waste of HMRC time to process all these excuses. So in 2015, a press release from the HMRC revealed that the standard 100 pound fine for failing to submit a return on time, would be waived without inquiry for those offering a reasonable excuse for lateness.
If you are feeling anxious about your ability to successfully appeal to HM Revenue and HMRC, it may be for the following reasons.
- Late return
- An inaccurate return
- Late payment
- Incomplete records
When you do appeal an HMRC expert who was not involved with your penalty decision will conduct a review.
You may be appealing over customs duty incurred, and if you are offered a review, you can accept it to state your case. Alternatively, you can appeal to the tax tribunal, and if your excuse is reasonable your penalty may be canceled.
Procedure to Appeal
If the HMRC issues you with a penalty letter, use the form that accompanies it to appeal.
There may be some extra documentation to fill in for Self Assessment, VAT, PAYE, and Corporation Tax.
You can get your penalty canceled if you failed to send a tax return because you no longer need to. So if you are no longer working, you can probably explain this online. If you are going ahead with the appeal you will need.
- Date of penalty
- Date of filing your Self Assessment
- Excuse for late filing
If you are appealing the 100-pound late penalty you can do your appeal online by setting up a Government Gateway Account.
Otherwise, submit your written appeal:
HM Revenue and Customs
When appealing on behalf of a partnership for a late return, submit your appeal by post using the SA371, The nominated partner must make the appeal. Do not pay the fine before checking if you can appeal as there are penalties of 1600 pounds or more for one year.
How much do you get fined for late tax return in 2021 and 2022? or Will I get fined for late tax return?
As you can see, the HMRC assessment is complicated, if you don’t feel able to meet the requirements and deadlines, employ the services of a tax expert.