The deadline for completing your self-assessment tax return for 2020/21 online is January 31, 2022. Paper tax returns have a deadline of October 31, 2021.
HM Revenue and Customs (HMRC) may allow you an alternative filing date for your tax return in extremely unusual circumstances. However, in most cases, an extension to the filing date is not feasible. HMRC has declared that no fines will be imposed if you complete your tax return online by February 28th, 2022, in order to relieve burden on people afflicted by the coronavirus.
Any unpaid tax should have been paid by the 31st of January 2022, regardless of how you submitted your tax return. After this date, late payments will incur interest.
What are the consequences for filing a tax return late?
If HMRC has requested you to file a tax return for 2020/21 and you miss the deadline, you will be penalized regardless of how late you are or how minor your tax amount is. Even if you are owed a refund, a penalty is usually imposed.
The following are the current penalties for submitting your self-assessment tax return late:
1 day late – £100 fixed penalty automatically applied. This is true even if you have no tax to pay or have paid your tax on time. If you haven’t submitted by February 28th, 2022, you will face this charge.
3 months late – £10 per day up to a maximum of £900 after 90 days.
6 months late – £300 or 5% of tax owed, whichever is greater.
12 months late – £300 or 5% of tax owed, whichever is greater. In extreme instances, you may be requested to pay up to 100% of the tax payable instead.
These penalties are cumulative, therefore the minimum late filing penalty for a 12-month late tax return would be upwards of £1,600, depending on the tax due.
Tax penalties for late payment are as follows:
30 days late – 5% of the tax owed – If you pay your tax due before April 1st, you will not be taxed. As a consequence of the epidemic, this deferral has been implemented.
Six months late – 5% of the unpaid tax payable on that date
12 months late – 5% of the unpaid tax owed on that date
It is also crucial to remember that on top of these fines, interest will be imposed on the existing tax plus any outstanding penalties. This is charged at a 2.75 percent rate.
What should I do if my tax return is beyond due?
To begin, assess if the tax return is due or whether you have a valid cause for the delay:
Cancellation of a tax return
If you believe you are not obligated to file a tax return, you should contact HMRC and request that the tax return be removed. If HMRC agrees, you will not be required to submit a return, and any penalties imposed for missing the deadline will be waived.
Remember to keep track of who you talked with and when you spoke with them, what conclusion is anticipated, and when you will get their decision.
HMRC is unlikely to withdraw a return if you were self-employed at any stage during the tax year – even if it was for a brief period of time. You typically have two years from the end of the tax year for which the return is due to seek its withdrawal, although it’s always advisable to deal with your tax matters as soon as possible.
Excuses that are reasonable
You may be able to appeal the penalty if you have a valid explanation for the delay.
On its website, HMRC provides numerous popular instances of Reasonable Excuses.
These are some examples:
You had an unexpected hospital stay that prevented you from dealing with your tax matters. Your partner or another close relative died just before the tax return or payment deadline.
You were diagnosed with a severe or life-threatening disease.
Your computer or software failed immediately before or during the preparation of your online return.
Problems with HMRC’s online services
You were unable to complete your tax return due to a fire, flood, or theft.
You couldn’t have expected the postal delays.
Delays as a result of a handicap
If you are infected with coronavirus (COVID-19),HMRC will accept coronavirus as a valid cause for failing to meet certain tax responsibilities (such as payments or filing dates).
In your appeal, explain how the coronavirus impacted you. You must still return and pay as soon as possible.
What’s the most improbable reason?
The following are not frequently recognized as plausible explanations:
you depended on someone else to submit your return and they did not your check bounced or payment failed due to a lack of funds 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
HMRC also disclosed some of the most ridiculous justifications it got.
If you’ve missed the deadline, you should submit your tax return as soon as possible.
If you can’t withdraw your tax return and don’t have a solid cause, the next best thing is to submit your tax return as soon as possible – even if you can’t pay your tax bill right now. As you can see, the fines for late filing rise with the length of the wait.
How much time do I have to make changes to my tax return?
If you make a mistake on your tax return, you may alter it, but you must do so by January 31, 2023, for a 2020/21 self-assessment tax return.