Are you planning to file a self-assessment tax return this year? If so, we want to hear from you. Don’t end up like the reader who was fined £1,600 for a late tax return, even though he didn’t owe any tax…
We’re looking to answer your burning tax return questions, which we’ll be featuring in an upcoming issue of our Which? Money magazine. We’re focussing on your self-assessment tax returns, so capital gains tax and inheritance tax are off the table for now.
A record high of 10.7 million people were required to file tax returns in January – 1.4 million more than 2007. So, filing a tax return is a task that’s affected more people than ever.
With the paper deadline fast approaching (it’s 31 October by the way), you may be thinking of making this year’s submission smoother than the last. And we want to help you avoid making costly errors.
Avoid tax return fines
For example, if you miss the deadline you’ll incur a fine of £100. If you still haven’t submitted it three months after this date, you’ll be looking at a daily fine of £10, up to a 90 day maximum of £900 (in addition to the fixed penalty). There are also big penalties for inaccuracies in your tax return, so it’s important to get things right if you want to avoid the taxman’s wrath.
I thought I’d share a nightmare example with you to ‘inspire’ you to share your own stories. One Which? member contacted us to say he’d been fined £1,600 for a late tax return – even though he didn’t actually owe any tax. This is because HMRC requires tax returns from all taxpayers within certain categories – for example self-employed sole traders – regardless of earnings.
You might be wondering how he was fined £1,600, when the above fines seem to suggest a maximum of £1,000? Well, if you haven’t submitted your tax return after six months you’ll be fined £300 or 5% of the tax due (whichever is higher). And after 12 months, you could be hit by the same again.
Your tax return questions
Hopefully you can’t top a £1,600 fine for a late tax return, but if you have any similar examples, please share them with us.
Now to your questions. If you’re a dab hand at tax returns, what would you have liked to have known when you started out? And if you’ve never completed one before, what worries do you have?
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