In 2015, almost 25,000 people filed their tax return with HMRC between 24 - 26 December. 1,773 people even completed theirs on Christmas Day! We don’t even want to think about how many people left it to the last minute and filed theirs on 31 January – deadline day.
There is a penalty of £100 for late tax returns (even if you’ve got no tax to pay), and the longer you leave it the worse the penalties get.
It might be the last thing you want to think about, but there are several good reasons to get your tax return submitted before January:
It gives you more time to save for your tax bill
The payment deadline is 31 January, even if you file your tax return early. So if you complete all your paperwork before then you’ll know exactly how much you owe, have longer to save and still be able to spend in the Boxing Day sales!
Remember, if your tax liability is over £1,000, you normally have to pay payments on account for next year too – so your tax bill might be higher than you think.
You may have overpaid tax
If you have overpaid tax, the earlier you file your return the sooner you will receive your refund. It’s surprising how many people receive a refund due to several reasons. Working several PAYE jobs is a common one.
HMRC can be hard to reach
HMRC hit the headlines last year when it was revealed that the average call wait time for their helpline was 47 minutes and they failed to answer more than a quarter of calls altogether.
If you leave your tax return to the last minute and find you need to contact them, you can expect to be waiting a while.
Plus if you’re filing online you’ll need your secure log in details, Unique Taxpayer Reference Number and Password. If you forget these details it’s not easy to reset them. HMRC usually send replacements in the post – so don’t leave it to the last minute to check you can get online.
HMRC aren’t very accepting of excuses – just ask the person whose tax papers got eaten by a rat (apparently)!
There are some very exceptional circumstances that HMRC will accept as an excuse for filing your tax return late, but it’s best not to risk it. A ‘reasonable excuse’ must be something major, and has to be agreed with HMRC in writing.
Some of the most bizarre excuses they’ve received from people filing their tax returns late include:
While the run-in with the cow sounds pretty scary (and we can’t help but wonder if that’s the same husband and wife!), HMRC didn’t accept any of these excuses and they all received a penalty.
Remember if you are late to file your tax return or paying your tax bill, you will receive a penalty and be charged interest. Penalties increase the later you leave it, so don’t be tempted to put it off.
It’s always best to complete your tax return as early as possible.
If you are an existing Theataccounts client, send us your paperwork as early as you can and we will do the hard work for you. If you are not a current client, contact us for a chat about how we can help.