For those who aren't sure if the upcoming Self Assessment deadline affects them, Self Assessment is a system HMRC uses to collect Income Tax. Tax is usually deducted automatically from wages, pensions and savings but people and businesses with other forms of income must report it in a tax return. Under the self assessment regime an individual is responsible for ensuring that their tax liability is calculated and any tax owing is paid on time.
Tax returns are issued shortly after the end of the fiscal year. The fiscal year runs from 6th April to the following 5th April, so 2020/21 runs from 6th April 2020 to 5th April 2021. A taxpayer has normally been required to file a tax return by 31st January following the end of the fiscal year.
If you fail to send your tax return ahead of the deadline you'll get a penalty of £100 if your tax return is up to 3 months late and you'll have to pay more if it's even later. HMRC will also charge interest on any late payments. Gov.uk has a handy calculator onsite which can be used to estimate your penalty for Self Assessment tax returns more than 3 months late, and late payments.
Last year, a total of 11.1 million1 managed to hit the Self Assessment deadline but nearly one million1 people in the UK missed the deadline for filing their tax return. Although HMRC urges Brits to submit their tax returns well ahead of the deadline, there are some reasonable excuses which HMRC will accept for a late tax return. These include2:
- your partner or another close relative died shortly before the tax return or payment deadline
- you had an unexpected stay in hospital that prevented you from dealing with your tax affairs
- you had a serious or life-threatening illness
- your computer or software failed just before or while you were preparing your online return
- service issues with HM Revenue and Customs (HMRC) online services
- a fire, flood or theft prevented you from completing your tax return
- postal delays that you could not have predicted
- delays related to a disability you have
Ahead of the 31st January 2021 deadline, HMRC announced they will consider coronavirus as a reasonable excuse for missing some tax obligations (such as payments or filing dates) if you can explain how you were affected by coronavirus in your appeal. You must still make the return or payment as soon as you can.
However HMRC are quite clear on what excuses will not be considered when it comes to filing a late tax return. They state that the following will not be accepted as a reasonable excuse2:
- you relied on someone else to send your return and they did not
- your cheque bounced or payment failed because you did not have enough money
- you found the HMRC online system too difficult to use
- you did not get a reminder from HMRC
- you made a mistake on your tax return
Every year HMRC share some of the funniest excuses they have received in the last 12 months. We've collated ten of our favourites which Brits have tried to get away with in recent years below4,5:
- My mother-in-law is a witch and put a curse on me.'
- 'I'm too short to reach the post box.'
- 'I was just too busy – my first maid left, my second maid stole from me and my third maid was very slow to learn.'
- 'Our junior member of staff registered our client in Self Assessment by mistake because they were not wearing their glasses.'
- 'My boiler had broken and my fingers were too cold to type.'
- 'I was up a mountain in Wales, and couldn't find a post box or get an internet signal.'
- 'My dog ate the post… again.'
- 'My hamster ate my post.'
- 'I've been cruising round the world in my yacht, and only picking up post when I'm on dry land.'
- 'A DJ was too busy with a party lifestyle – spinning the deck… in a bowls club.'
While the excuses here were not successful with HMRC, we know that Self Assessment can be tricky. If you have questions or concerns about this years deadline, contact the team today: https://www.sheards.co.uk/contact-us