Deadlines and Penalties
Help with your Tax Return guide
If you receive a Tax Return, you are legally obliged to complete it, even if you think it is not relevant to you.
If you do not submit a completed Tax Return, you will be fined and HMRC may issue an estimated tax bill (called a ‘determination’). This estimated bill will stand until you send in the completed Tax Return. You have only three years from the 31 January filing date to replace the estimated bill. For years where the bill has not been estimated you have four years from the end of the tax year in which to submit the return.
Asking HMRC to withdraw a return
If you consider that you do not need to submit a tax return, for example because all your income is taxed under PAYE, you can phone HMRC on 0300 200 3310 and ask for the tax return to be withdrawn. If HMRC agrees, this will means that you no longer have to file a return and any penalties issued for missing the tax return filing deadline will be set aside.
There is a two year time-limit from the end of the tax year in which to ask HMRC to withdraw a tax return.
Completing and filing a return
Your Tax Return must normally be filed (completed and submitted to HM Revenue and Customs) by 31 October following the tax year end (5 April) if you file on paper, or by 31 January following the tax year end if you file on-line. So the 2017 Tax Return (for the tax year 2016-2017) is due by 31st October 2017, if filed by paper, or by 31st January 2018, if filed on-line. You will be sent your Tax Return – or a notice to file on-line – about May after the end of the tax year.
If you register for self assessment late (within three months of the filing deadline or later), the deadline is extended to three months from the date of issue of the return. The revised due date will be shown on the Tax Return/notice to file that you are sent.
What happens if my tax return is late?
There are penalties for late payment of tax, late filing of tax returns and late notification of liability to pay tax.
Penalties for late filing
- You will be charged a penalty, even if you do not owe any tax.
- If you miss the filing dates of 31 October following the end of the tax year (for paper returns) or 31 January next following (for on-line submission), you will be charged a penalty of £100, and this will not be refunded, even if no tax is owing. Eg. tax returns for the year to 5 April 2017, should be filed on paper by 31 October 2017, or on-line by 31 January 2018
- If you are three months late, you will be charged a daily penalty of £10 per day, up to a maximum of £900
- If you are six months late there will be a penalty of £300 (or 5% of the tax owing if this is greater)
- If you are 12 months late, you will be charged another £300 (or 5% of the tax owing if this is greater). In exceptional circumstances a higher penalty of up to 100% of the tax due is possible
If you are in a business partnership the penalties apply both to the late submission of the partnership return and to the individual partner’s returns.
Penalties for late payment
- 5% of tax unpaid after 30 days
- Another 5% of tax unpaid after 6 months
- Another 5% of tax unpaid after 12 months
Penalties for failing to notify liability to pay tax
If you have a new source of income on which there is a tax liability, you should notify HMRC by 5 October following the end of the tax year in which the income arose.
Eg. Maggie inherits a house and first rents it out in June 2016. This is in the tax year to 5 April 2017. So Maggie must tell HMRC about the rental income by 5 October 2017 at the latest.
If HMRC is not notified in time ‘failure to notify’ penalties can apply. These are based on the tax due and unpaid at ‘due date’ – normally the 31 January following the end of the tax year. The size of these penalties depends on taxpayer behaviour.
There is a summary and examples of how this works in compliance factsheet CC-FS11 ‘Late notification penalties’ which can be downloaded from the leaflets section of the Gov.uk website.
Appealing against a penalty
If there are exceptional circumstances which explain why you missed the tax return filing deadline, you can appeal against the penalty. You can download the usual appeal form SA370 from the Gov.uk website.
If you pay your tax late you will be charged interest. If your tax is due on 31 January and is not paid on time, interest will run from 1 February. You will also be charged interest on late payments on account (which are due on 31 January and 31 July). For more information on interest and payments on account, see our self assessment – paying tax page.
Tip from TaxAid If your tax return will be late, but you have a good idea what the tax will be, make that payment by the due date. If your estimate is right and all tax has been paid on time, this will reduce the late payment penalties (but will not avoid late filing penalties). If you have a good reason for missing the deadline, such as an emergency trip to hospital or a bereavement, then you should tell HMRC. People who have a genuine excuse may win their appeal without the need for a hearing, as HM Revenue and Customs may agree with you if you show a determination to go to the Tax Tribunal.
Tip from TaxAid You can protect your position if you routinely keep copies of forms and correspondence sent to HMRC, and keep ‘proof of posting’. If extraordinary circumstances prevent you meeting deadlines, keep any evidence you can and make sure HMRC know as soon as possible.
What if I have many years worth of tax returns to complete?
If you are worried because you have a lot of outstanding Tax Returns and don’t know how to start completing them, we recommend that you read the “how to complete tax returns” section of this guide and, if you are still having difficulties, then call the TaxAid helpline with your questions.
You may normally only submit three years worth of late tax returns. For example, in the tax year 2017-18 (ie from 6 April 2017 to 5 April 2018) you may submit returns for 2016/17, and three late returns – 2013/14, 2014/15 and 2015/16. In some cases, HMRC may process older returns.
If HMRC has raised estimated tax bills (called ‘determinations’), then you have only three years from the 31 January filing date within which to send in a return ( see http://www.hmrc.gov.uk/manuals/chmanual/CH56100.htm ).
Once this deadline has passed, your only statutory recourse is ‘Special Relief’. Special Relief may be difficult to obtain unless there are exceptional reasons why you have missed the tax return deadlines and you have good evidence of your income.
If you think you may need to apply for Special Relief, you should contact TaxAid. The is more information about Special Relief on the TaxAid website in the tax debt guide – see the end of the page on bankruptcy. There is technical guidance on the HMRC website at http://www.hmrc.gov.uk/manuals/sacmanual/sacm12215.htm.
What happens if I don’t send in my Tax Return?
If you are sent a tax return, you are legally obliged to fill it in and send it back, even if you don’t owe any tax (even if you have not earned any money for the year in question). The only exception is if you can persuade HMRC to withdraw the tax return (see above).
If you don’t sent the return back you will be charged penalties and might be sent an estimated tax bill (called a determination). Once a determination has been made HM Revenue and Customs is entitled to the tax due as set out on that determination and can collect it through the courts – even to bankruptcy. The only way to cancel the debt is to send in a tax return to establish the correct amount of tax due.
If you are worried about what will happen because you are having difficulty paying your tax, please see our Problems Paying your Tax guide.
If you need help completing your tax return and your income is too high to qualify for help from TaxAid, please see choosing an accountant or tax adviser.
Being out of time – impact on claims and elections
There are many tax claims and elections – and all have time limits. They cover such issues as claiming Blind Person’s Allowance – a higher amount of tax free pay – to making loss relief claims. In general, the default time limit for such claims is four years from the end of the tax year; but some claims and elections, in particular, some loss relief claims, are on a shorter time scale. This means that being in arrears with your tax returns could mean that you potentially miss making a valuable claim or election.
There is technical guidance on claims and election time limits on the HMRC website at http://www.hmrc.gov.uk/manuals/sacmanual/SACM3035.htm
See also – Penalties for errors and mistakes on returns
You may be charged penalties if there are errors on your return. See ‘Penalties for errors and mistakes on returns’ in the section ‘Problems with the returns you have submitted‘.