Act now to avoid the tax return penalties23 January 2020
It is human nature to leave tasks until the last minute, especially those which are perceived as difficult or boring, such as filling in forms.
With the start of the New Year, attention tends to turn to the end of the tax year, where savers and investors realise they have limited time left to make the most of their various tax allowances before the 5 April deadline. But for over many people there is a much more pressing deadline which should be their immediate priority: submitting their self-assessment tax return for the 2018/19 financial year.
The final date for filing self-assessment tax returns for the 2018/19 tax year is midnight on 31st January, which can now only be done online as the deadline for submitting paper returns expired at midnight on 31 December. Failure to do these by even one day will result in a £100 fine, which rises by £10 a day to a maximum of £900 by 1 May and continues to ratchet up further thereafter, so it really does make sense to get on to this as a top priority in case you need to find cash to pay a bill at short notice.
Furthermore, if you have been late the past two years, the penalties for your 3rd consecutive late filing will rise to £500 a day.
Commenting, Gary Smith, chartered financial planner at Tilney, says: “It is very easy to put off things you perceive as boring until the eleventh hour but delaying your tax return could be stressful and risky.
“Filing a tax return does involve some preparation such as tracking down your taxpayer reference, payslips and your annual P60 form, details of dividends and tax credits received, any personal pension contributions made and calculating possible capital gains crystallised on shares or other assets. Importantly, to file online you need an HMRC account and if you do not have one you will need to be sent an activation code in the post – so get your skates on if you do not already have an account.
“Importantly, any additional tax due will be eligible for payment by 31 January, so leaving your return until late in the day might mean you could be hit with an unexpected and possibly sizeable demand with no time to raise the necessary cash which may be in shortly supply after the Christmas credit card bills have arrived. There are of course unwelcome penalties for late payment, with a 5% charge on the tax owed for late payment after 30 days as well interest charged at a rate of 3%. Those owing less than £3,000 could have avoided the need to make a lump sum payment altogether and settled the tax owed through PAYE had they filed a paper return by 31 October 2019 or on online by the end of December, so it is definitely worth making a note to get ahead of the curve next time.
“Speaking to a financial planner could help get your finances planned for the year ahead and allow you to get ahead of the curve for important deadlines.
Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years. Our clients are private investors, charities and professional intermediaries who trust us with over £23 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.
We have won numerous awards. Tilney has been awarded Best Conventional Advisory Service at the 2018 City of London Wealth Management Awards, Best Advisory Service in the 2015 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. Bestinvest was voted Best SIPP Provider and Best Fund Platform at the 2017 City of London Wealth Management Awards, Best Direct SIPP Provider at the YourMoney.com Awards 2017, Best Stocks & Shares ISA Provider at the 2017 Shares Awards, as well as Best Self Select ISA Provider, Best Online/Execution-only Stockbroker and Best Investment Platform 2017 at the FT and Investors Chronicle Investment and Wealth Management Awards, as voted by readers of the FT and Investors Chronicle.
Headquartered in Mayfair, London, the Tilney Group employs over 1,000 staff across our network of 30 offices, enabling us to support clients with a local service throughout the UK.