Forget any moral imperative. Forget wanting to get it off your desk. The main reason for doing your tax return on time is simple - the penalties that HMRC can impose on you:
- an initial £100 fixed penalty, which applies even if there is no tax to pay, or even if the tax due is paid on time;
- after three months, additional penalties of £10 a day, up to a maximum of £900;
- after six months, a further penalty of 5 per cent of the tax due or £300, whichever is greater; and
- after 12 months, another per cent or £300 charge, whichever is greater.
This August, HMRC issued half a million penalty notices in the £1,200 region (some more). That means that HMRC just made £600,000,000 from people not doing their paperwork. The amount is right – I checked it twice.
The moral of this story is clear. Don’t be a statistic.
So what should you do to avoid this? First, keep your records properly, especially if you are self employed. Second, don’t bury your head in the sand. Third, if you can’t do it yourself, speak to a professional. And above all – don’t leave it to the last minute!
If you need help preparing your tax return, please contact me on James.odds@mablaw.com.