As the January 31 Self Assessment deadline approaches, HM Revenue and Customs reveals that 3.8 million individuals, among them numerous landlords, have not yet filed their tax returns. This statistic underscores the urgency for those who still need to submit their financial details for the 2022-2023 tax year. The tax authority anticipates a substantial number of tax returns, projecting over 12.1 million filings along with the associated payments.
As of January 24, the day before yesterday, more than 8.3 million online returns have been successfully submitted. This indicates both the significant volume of individuals complying with the deadline and the substantial workload handled by HMRC during this period. Landlords are reminded of the importance of timely tax return submission to avoid potential penalties and ensure compliance with tax obligations.
Failing to submit your tax return on time attracts a fixed penalty of £100, regardless of whether you owe any taxes or manage to pay them promptly. This penalty is incurred even if there is no tax liability. Following this initial penalty, additional daily fines of £10 are imposed for up to three months, reaching a maximum total of £900. If your tax return remains outstanding after six months, a further penalty is applied, equating to five percent of the tax due or a minimum of £300, depending on which is higher.
Once a year has elapsed since the original deadline, another penalty is enforced. This penalty mirrors the six-month penalty, imposing an additional five percent charge or a minimum of £300, depending on the higher amount. These escalating penalties underscore the significance of adhering to tax return deadlines and fulfilling your financial obligations to avoid the accruing financial consequences. Timely submission is crucial to prevent incurring avoidable penalties and to maintain compliance with HM Revenue and Customs regulations.
HMRC acknowledges individual circumstances when considering missed deadlines, allowing leniency for those with valid reasons. Providing a genuine excuse may exempt individuals from initial penalties, emphasizing the importance of open communication.
However, navigating the tax system also involves understanding the implications of late payments. Additional penalties, equivalent to five percent of the unpaid amount, accrue at 30 days, six months, and 12 months. Simultaneously, interest is levied on overdue taxes. This underlines the necessity of both timely filing and payment, and a transparent dialogue with HMRC in case of unforeseen circumstances.
As the Self Assessment deadline approaches, the HMRC spokesperson emphasizes the importance of taking proactive steps to complete tax returns. Navigating the process is simplified through the HMRC website, offering comprehensive information on submission and payment procedures. Once the tax return is submitted, individuals can conveniently access details about their tax liability and settle payments seamlessly online or through the user-friendly HMRC app.
For those encountering challenges in meeting the full payment, HMRC extends support by facilitating the establishment of a Time To Pay arrangement. This flexible option allows individuals to manage their tax obligations affordably. Notably, the process can be initiated online, streamlining the experience for individuals with outstanding amounts below £30,000, eliminating the need for direct communication with HMRC.