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What penalties do I face for Late or Missing Tax Returns?

If you have missed the deadline and have faced penalties it is still imperative to get the tax return completed and paid to reduce the penalties you will have to deal with.

Posted: 24th January 2024 by Courtney Evans
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What happens if I pay late?

You will be charged interest on payment after the due date. The interest rate is currently set at 7.5%.

If you miss the deadline date there will be a £100 penalty fee which must be paid. If you are late by three months past the date there will be another £100 fee. Further than this there will be a 10% interest fee added on to your outstanding bill.

So if your bill is 20,000 and you are paying this 5 months late you will have to pay the initial £100 fees and then your total bill rises to 22,000 due to the interest rate.

If you have missed the deadline and have faced penalties it is still imperative to get the tax return completed and paid to reduce the penalties you will have to deal with.

Reasons they will allow for a late payment

If you pay late and have a viable reason you must tell HMRC and they could remove the penalties.

These could include;

  • You were in the hospital shortly before and during the deadline with no way to complete it
  • A HMRC software fault
  • A family member has been ill or has passed away shortly before the deadline
  • Delays related to a disability of yours
  • A theft, flood or fire prevented you from completing the payment on time

You may be able to appeal any penalties charged to you however, you must pay the tax return as soon as possible.

What happens if I can’t pay my tax return?

If you cannot pay your tax bill then you may be liable to set up instalments, only if HMRC believe you will keep up with the repayments.

If you miss a payment HMRC will contact you via letters, texts or even visiting you. If you fail to contact HMRC or agree on a payment plan they could;

  • Collect what you owe directly from your wages or pension payments.
  • They could take you to court
  • Close down your company if the tax is a business tax
  • Have a debt collection agency to collect the money
  • They could retrieve your possessions to sell them
  • Take the money directly from your bank account or savings account.

Find out how to complete your tax return and important information to know  here.

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