RETURN ON TIME
April 12 2012.


Most businesses will be aware that if tax payments are late then costly penalties will be incurred. But perhaps it is not quite so widely known that the same is true if the return itself is late, with automatic fines levied regardless of whether anything is owed or not.

There are key dates each year for when tax returns must be sent and payments made. If they are missed then interest and penalties may be incurred.

Deadlines for sending in tax returns
31 October: all paper returns
If it's a paper tax return, it must reach HM Revenue & Customs (HMRC) by midnight on 31 October.

31 January: online returns
All online tax returns must reach HMRC by midnight on 31 January.

Don't delay
If the deadline is missed, the longer the delay, the more there is to pay. It's important to get the return to HMRC as soon as possible and, if a Partnership tax return is late, each partner will have to pay the penalties as shown below.

Penalties for missing the tax return deadline
One day late; A penalty of £100. Applicable even if there is no tax to pay or the tax owed has been paid.

Three months late; £10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above.

Six months late; £300 or five per cent of the tax due, whichever is the higher. This is as well as the penalties above.

12 months late; £300 or five per cent of the tax due, whichever is the higher. In serious cases, up to 100 per cent of the tax due may be payable instead. These are as well as the penalties above.

Example
Mrs A's tax return is due on 31 January 2013 but HMRC doesn't receive it until 5 August 2013. It is over six months late so she will have to pay;

£100 fixed penalty
£900 penalty - £10 each day from 1 May to 29 July, when the maximum 90 day penalty is reached.
£300 or five per cent of the tax due - whichever is the higher

There may be a reasonable excuse for sending in a late tax return late.

Further information can be found at http://www.hmrc.gov.uk/sa/deadlines-penalties.htm#3