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Self Assessment tax returns

If you do not get your self assessment tax return to HMRC by the relevant filing date (31st October for paper returns and 31st January for online submissions) you will be liable to pay a late filing penalty and the later your tax return is, the higher the charges become.

For returns that are submitted between one day and three months late, there is a fee of £100.00. After three months, there is a £10.00 charge for every day the tax return remains overdue and this can go up to a maximum of £900.00. After six months, if the tax return has still not been submitted, the penalty increases by 5% of the individual’s tax bill (minimum £300.00). An additional charge of either £300.00 or a further 5% of the tax bill, depending on which amount is greater, will be added to the bill after twelve months and in severe cases, HMRC may charge a penalty of 100% of the entire tax bill.

Unless, you can provide HMRC with a plausible and legitimate reason for the late submission of your tax return you are completely liable to pay these fees, regardless of whether any tax was due on the return.

Corporation tax returns

Corporation tax returns must be submitted to HMRC within twelve months of its financial year end date. If the corporation tax return is filed after this period, the company will be liable for penalties from HMRC.

Similarly, to the penalties for late filing of self assessment returns, the amount the company will be fined for failing to submit the corporation tax return on time, depends on how late the return is. The standard penalty for corporation tax returns that are filed up to three months after the filing date is £100.00. However, if the company has been late in filing its return for three or more consecutive accounting periods, this charge increases to £500.00. If the corporation tax return is more than three months late, the standard penalty doubles to £200.00, as does the penalty for companies that have submitted its returns late three times in a row, which increases to £1000.00.

In addition to the standard penalties, HMRC may also charge a tax related penalty. Tax related penalties are usually charged if a company is more than eighteen months late in submitting its corporation tax return or, if a company has not paid the correct amount of tax to the revenue. In the former instance, if the return is more than eighteen months late, but less than twenty- four months late, a charge of 10% of the unpaid tax will be fined. If the return is more than twenty- four months late, this fee will double to 20% of the unpaid tax.

If a corporation tax return in not submitted to HMRC at all, the revenue will estimate how much tax is owed by the company and this figure cannot be disputed.

At The Accountancy Partnership, we do our best to help clients avoid incurring any penalties by sending out regular reminders of when their year ends are and when their returns are due. We also strive to have our clients’ accounts completed within two weeks of receiving their records to give them as much notice as possible as to their tax liability.

If you would like further information on what has been explained here, or the tax return services we can offer you please do not hesitate to phone or email us, or alternatively, you can simply use the live chat link available.

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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