Nearly 11 million people are self-employed in the UK and so need to complete a tax return. Although the vast majority of these will file their tax return before the 31 January deadline, in 2018 over 840,000 people failed to do so, thus incurring at least a £100 fine.
Although they may seem intimidating, HMRC does understand that some people do have legitimate excuse for not being able to file their tax return on time. However there are some excuses that quite simply won’t pass the muster. Every year HMRC releases a list of some of the worst excuses that they have received (and declined) for people being late submitting their tax returns.
Some of our favourites over the years have included:
- I couldn’t file my return on time as my wife has been seeing aliens and won’t let me enter the house.
- I had a run-in with a cow.
- A wasp in my car caused me to have an accident and my tax return, which was inside, was destroyed.
- I’ve been far too busy touring the country with my one-man play.
- My ex-wife left my tax return upstairs, but I suffer from vertigo and can’t go to retrieve it.
- My business doesn’t really do anything.
- I spilt coffee on it.
- My wife helps me with my tax return, but she had a headache for ten days.
- My dog ate my tax return...and all of the reminders.
- My pet goldfish died.
- After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else.
- I’ve been too busy submitting my clients’ tax returns (from an accountant).
- My laptop broke, so did my washing machine.
- I had an argument with my wife and went to Italy for 5 years.
Although undeniably amusing, none of the above excuses were accepted by HMRC. However there are a number of reasons that HMRC will accept for you not being able to file your tax return on time, such as:
- The bereavement of a close family member.
- A serious illness or an unexpected stay in hospital.
- A fire, flood or theft that meant that you couldn't complete your tax return.
- You have a disability that caused you not to be able to meet the deadline.
- Problems with your computer, software package or HMRC website just before or during filing your online tax return.
- Problems with the post that were beyond your control.
HMRC late filing penalties
HMRC promise to assess each claim on a case by case basis, but beware that if you fail to submit your tax return on time and you don’t have a ‘reasonable’ excuse then you will be liable to a penalty, which increases the later you are:
- 1 day late – you will be fined £100.
- Up to 3 months late - an extra £10 is added to the £100 for every further day that you do not submit your tax return past the deadline. This is capped at 90 days, meaning you could be liable for a maximum fine of £1,000.
- 6 months late – An additional £300 or 5% of the tax due (whichever is higher) will be added on top of the above penalties.
- 12 months late – A further £300 or 5% of the tax due (whichever is higher) will be added on top of the above penalties. In some cases you could be fined 100% of the tax due, thereby doubling your overall tax bill.
If you are struggling to complete your tax return, then relying on excuses is never going to be a good idea. Many accountants only charge relatively low fees (around £150) for a simple tax return submission, and as long as you go to them in enough time they will be able to handle your tax return for you, often saving you money on your tax bill in the process through their expert knowledge of tax laws, reliefs and allowable deductions.
Handpicked Accountants will connect you with a number of exceptional accountants in your area. Each firm featured on Handpicked Accountants has been thoroughly vetted and have built up solid reputations for being some of the best firms in their areas. Contact Handpicked Accountants to find the perfect accountant for you today.