How to Avoid Self-Assessment Penalties
If you submit your self assessment tax return late, fail to pay any owed tax on time, or make mistakes in your self-assessment submission, you will be liable to HMRC penalties.
What are the penalties for missing the deadline?
The penalties for such late tax returns include an initial £100 fixed penalty even if the tax due is paid on time. After 3 months, additional daily penalties include £10 per day which can reach up to a maximum of £900. Likewise, a further penalty of 5% of the tax due or £300, whichever is greater is charged after 6 months. Another 5% or £300 charge, whichever is greater is charged after 12 months.
As this year’s self-assessment tax return deadline on 31st January has already passed, you can use the following ways to avoid these self-assessment
penalties next year.
What are the ways to avoid self-assessment penalties?
• You must make a note of the deadlines in the first place and must submit your tax return by 31st January. This means any tax liabilities you have must reach HMRC bank account before the deadline.
• Record and organise all the relevant paper works like P60, P11D, bank statements, details of child benefits received, money made from extra business, investments and property for your submission. It is very important to do because these paper works will help in filling your tax return form.
• Take care of all sources of income received during the tax year. It is because if errors are found in your submission, you can face further measures. So, you can invest in a tax accountant
who can help you with such matters and suggest what to include and what not to in your return.
• Since you are responsible for submitting your self-assessment tax return on time, you should keep tabs on progress if your accountant is submitting instead of you.
• Before you hit the deadline, check your submission thoroughly so there aren’t any mistakes. Remember if any spelling errors and incorrect figures are found in your submission, you normally get 12 months from the return submission deadline to correct it.
We hope you apply this plan of action for avoiding panic next year. If you want to manage your self-assessment tax return on time and correctly, our accountants
are always ready to assist you.